17th Jul 2020 12:00
(Alliance News) - Caledonian Trust PLC on Friday said it expects the sale of St Margaret's House to Drum Property Group Ltd to be delayed due to Covid-19 and restrictions imposed to curtail the spread of the virus.
The property investor and developer said that due to the restrictions, the missives in relation to the disposal have now been varied and therefore, a variation agreement was entered into on Thursday. The amended missives extends the period for Drum to obtain detailed planning permission to September 30, and also extends the period for Drum to obtain a pre-let agreement for the student accommodation to be built on part of the property to June 30, 2021.
Caledonian Trust said that as a result, it expects the disposal to complete in the first quarter of 2022, rather than in the summer of 2021 according to the amended forecast in April.
The sale of St Margaret's House to Drum was originally announced in February 2018 and at that time was due to take "up to 18 months" due to the fact that the sale is conditional upon Drum obtaining details planning permission and consents for a mixed use development of student and residential accommodation. Underlying the conditional purchase was a proposal involving Drum entering into a pre-let agreement with a third party tenant for student accommodation to be built on the property.
In April 2020, Caledonian said the pre-letting had not taken place and "material uncertainty" had arisen as to whether the prospective tenant would pursue its interest in the location. As a result, both parties altered the missives relating to the disposal, including a drop in the sale price for St Margaret's House to GBP11.5 million in cash from the previously agreed GBP15.0 million.
Shares in Caledonian Trust were untraded on Friday morning in London, last quoted ta 132.50 pence each.
By Ife Taiwo; [email protected]
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