17th Jun 2016 16:31
LONDON (Alliance News) - Intu Properties PLC on Friday said it has exchanged contracts to purchase the remaining 50% stake in the Merry Hill shopping estate it doesn't already own for GBP410.0 million, after noting it was in talks for the site on Thursday.
The FTSE 100-listed property group said this represents an income yield of 5.2%, based on net rental income of GBP43.0 million, adding that it purchased the remaining 50% stake from wholesale funds manager Queensland Investment Corp.
The estate comprises of the Merry Hill shopping centre, two retail parks, office and leisure uses along with development land, and an external valuation by independent appraiser Cushman & Wakefield found the entire asset amounts to GBP889.0 million, Intu said.
Intu said the balance of the consideration will be met from its existing resources, but a GBP500.0 million loan has been arranged with a 2018 maturity, to replace the current GBP191.0 million loan facility, which was to mature in 2017, secured on the 50% originally held.
The all-in cost of debt on the new facility is estimated to be around 3.0%, Intu added. As such, its proforma loan to value has increased to 43% from the 41% at March 31.
Intu noted that the acquisition, which is expected to complete shortly, should add to earnings from completion.
"We are pleased to have been able to acquire the remaining 50% interest in intu Merry Hill, some two years after our original 50% acquisition in 2014. Our ownership and asset management to date has provided us with ample evidence of the centre's upside potential, whatever the outcome of the EU referendum," said Chief Executive David Fischel.
Shares in Intu closed up 1.3% at 286.47 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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