8th Oct 2014 06:48
LONDON (Alliance News) - Shopping centre owner Capital & Regional PLC Wednesday said it has increased its stake in The Mall Fund to 99.13%, after redeeming units across seven minority unit holder accounts for GBP27.1 million, and said the group's mall property valuation rose over the third quarter.
The property company wants to take full control of the fund, and agreed to redeem 69.5 million units, taking its stake to 99.13%, from 91.82%. The units were redeemed at 39 pence a unit, a 3.8% discount to the unit price reflected in its September 30 property valuation of GBP723.0 million.
It said that to help with funding, The Mall Fund has agreed amendments to its five-year secured bank facility with Morgan Stanley, converting the GBP25 million capital expenditure facility into an additional loan of GBP30 million, a move that increases the total term loan to GBP380 million.
The amendments agreed will increase the interest rate margin by 20 basis points across the GBP380 million facility, meaning on draw down the cost of debt would be 3.46% based on current 3 month LIBOR. At full drawn down, the loan-to-value of The Mall Fund will be 52.6% based on the September 30 valuation.
"The redemption of the units by the Mall Fund marks further progress in our aim of buying out all of the minority unit holders and will help to facilitate restructuring the Fund to drive cost efficiencies," Capital & Regional Chief Executive Hugh Scott-Barrett said in a statement.
Separately, the company said its mall property valuation on September 30 was GBP723.0 million on September 30, up 2.5% from GBP705.2 million at the end of June, representing a net initial yield on September 30 of 6.36%.
"It is encouraging to see a further increase in valued income in the third quarter which, when combined with yield compression of 12 basis points, has contributed to the 2.5% increase in Mall property values in the period," Scott-Barrett said.
By Steve McGrath; [email protected]; @stevemcgrath1
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