Capital & Regional sell The Junction Fund
Capital & Regional plc ("the Group") announces that subsidiaries of Hammerson plc have acquired The Junction Fund, in which the Group had a 13.43% interest. The headline price for the properties in the transaction, prior to deductions for rent frees and certain capital expenditure commitments, is £259.5 million (100% of the Fund), or £34.85 million for the Group's share.
The Junction Fund is a specialist retail park fund, owning four retail parks and two separate development sites, which were valued at £266.7 million at 30 September 2012. Capital & Regional was the property and asset manager for the Fund and this role has been terminated as a consequence of the transaction.
For the six months to 30 June 2012 the Group's share of recurring pre-tax profit of The Junction Fund was £0.1 million and the Group's share of gross property assets at that date was £36.4 million. The carrying value of the Group's investment in the Junction Fund was £16.5 million at 30 June 2012. Disposal proceeds including the performance fee received by the Group are expected to be around £14.1 million, but the exact amount is subject to the outcome of certain retentions. £13.1 million of these proceeds were received on completion in cash, with the balance to be paid as the retentions are worked through. The proceeds of the disposal will be used to repay existing debt on the Group's central facility. The disposal is expected to have a minimal impact on recurring profitability.
Morgan Stanley & Co Ltd acted as financial advisor, and Cushman & Wakefield and Wilkinson Williams acted as property advisors to the Junction Fund investors in respect of this transaction.
Hugh Scott-Barrett commented:
"The disposal of our interest in The Junction is an important move in delivering our strategy of exiting non-core assets and degearing to focus on a core portfolio of dominant UK community shopping centres."