Multiplex has continued to end its British property investment love affair by selling more than $166 million worth of United Kingdom assets to Aldersgate.
The property interests were previously held within R&M Investments Multiplex’s original bidding vehicle for the Australian property group and Aldersgate’s joint investment in Duelguide PLC in the United Kingdom.
According to Multiplex, the transaction is consistent with its strategy outlined for its UK portfolio back in February, which rids itself of the group’s U.K investment assets while holding onto a development portfolio potentially worth $6.5 billion.
Multiplex Developments U.K chief executive Jayne McGivern said the sale agreement followed a comprehensive review by Multiplex of the UK development portfolio, allowing the business to concentrate on “select core opportunities”.
“The agreement leaves the development business in the United Kingdom in a strengthened position through the release of equity that can be applied to those development opportunities which remain,” McGivern said.
The agreement allows Aldersgate, or entities associated with Aldersgate, to buy Multiplex’s 45% interest in the Sapphire Retail Fund; 50% interest in R&M Funds Management Ltd; 25% interest in Rushmere Shopping Centre, Northern Ireland; 25% interest in Paddington development site, Central London; a 25% interest in St Enochs development site, Glasgow; and an 8.5% interest in Stockley Park, West London.
The Multiplex sell-down is subject to conditions including the ultimate restructure of Duelguide and the consent, if necessary, of various third parties, the Multiplex UK chief added.
“The decision to sell interests in the Sapphire Retail Fund and its management company reflects strong investor appetite for this type of property investment and the Group’s desire to pursue a UK funds management business in its own right, rather than in joint venture,” McGivern said.
However, the sell-down profit is not sufficient to alter existing guidance for the current financial year.
“This transaction allows the Group to focus its efforts on a select number of key projects and concentrate on value creation for securityholders,” McGivern said.
Multiplex still holds interests in development prospects including – Eden, High Wycombe, which includes the Octagon Centre in South East England; Union Square in Aberdeen, Scotland; Newcastle City Centre; Stamfordham Road Retail Park also Newcastle; Mereham regeneration scheme in Cambridge Shire; Cricklewood urban regeneration scheme in North London Castle House, Elephant & Castle in London; and West Cromwell Road also in London.
Eden, High Wycombe, a $600 million Regional Shopping Centre redevelopment is the most advanced of these projects and currently in the construction phase.
Fully developed, the value of the remaining Multiplex UK portfolio together with a 50% interest in a mixed use scheme in Gibraltar is approximately $6.5 billion.
By Nelson Yap
