5th Mar 2015 10:35
5 MARCH 2015
INTU PROPERTIES PLC
SHAREHOLDER MEETING IN RESPECT OF EXERCISE OF OPTION TO ACQUIRE SITE FOR PRIME RETAIL AND LEISURE RESORT IN SPAIN
Intu Properties plc (the "Company" or "Intu") announces that it has exercised the option to purchase certain land in the province of Malaga, Spain, from subsidiaries of the Peel Group. The exercise of the option is further to arrangements entered into with the Peel Group on 17 February 2012, which were approved by shareholders of the Company, and is also subject to approval from the shareholders of the Company. A circular and notice of general meeting will be posted to shareholders on 9 March 2015 with a general meeting scheduled to be held on 15 April 2015.
The option relates to a site comprising two adjacent parcels of land which are approximately 24 hectares (the "Primary Land") and approximately 6 hectares (the "Galvez Land"). The purchase price for the Primary Land includes a €7.5 million deposit which has been paid by Intu to the Peel Group and €30 million which will be payable by Intu on the completion of the transaction ("Completion"). The Peel Group will apply the sum of €30 million in subscribing for Intu ordinary shares in accordance with, and at a price established by, the terms set out in the original option agreement and which are described in full in the circular. The purchase price for the Galvez Land is €8,075,000, payable in cash on Completion. In addition, certain agreed liabilities already accrued by the Peel Group ("Pre-Construction Project Costs") which have been shared between Peel Group and Intu, will be borne by Intu and Intu will take on certain guarantees currently provided by the Peel Group. The Company has also incurred approximately €4.2 million of costs to date during the period. As part of the Completion, Intu will also take on an arrangement under which it can purchase additional land from a third party for the purposes of the development. If Intu elects to proceed with this arrangement, it will pay to that third party the remainder of the purchase price for this additional land of €4.8 million.
Since entering into the option, significant design development, land assembly and licensing progress has been made. Intu's aim is to develop the site into a super-regional shopping and leisure destination for the Costa del Sol area, accessible to an estimated population of 1.6 million people within a 45 minute drive time, together with 9 million tourists annually. The plans envisage a total development cost of some €450 million with an initial yield in excess of 7 per cent., based on the current design. Intu will look to secure third party debt finance and possibly an investment partner before development begins. The development of the Primary Land and the Galvez Land will be subject to the receipt of additional planning and other consents and to prevailing market conditions at the relevant time.
The option was granted by Peel Holdings, a member of the Peel Group (now Peel Holdings Land and Property Company),of which John Whittaker, Deputy Chairman and Non-Executive Director of Intu, is the chairman and which, through associated companies, is Intu's largest beneficial shareholder. The exercise of the option qualifies as a "smaller related party transaction" under Listing Rule 11.1.10 R which does not require shareholder approval. However, the transaction constitutes a substantial property transaction with a person connected with a director of the Company under the Companies Act 2006 and accordingly the exercise of the option is conditional upon the approval of shareholders.
The exercise of the option accords with Intu's strategy for Spain which, in line with its approach in the UK, is to be the leading owner, developer and manager of regionally pre-eminent shopping centre destinations throughout Spain and the proposed development of the Costa del Sol site follows Intu's recent acquisitions of two top 10 Spanish shopping centres, Parque Principado, Asturias and Puerto Venecia, Zaragoza.
Enquiries:
Susan Marsden Group Company Secretary ++4(0)20 7887 7004
Intu Properties plc
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NOTES TO EDITORS
Intu is the leading owner and manager of prime regional shopping centres in the UK.
A FTSE 100 company, Intu owns and operates many of the UK's biggest and most popular retail and leisure destinations, including nine of the top 20, incorporating super-regional centres such as intu Trafford Centre, intu Lakeside and intu Metrocentre, together with a number of city centre locations from Watford to Newcastle.
With over 21 million sq. ft. of space hosting top UK and international retailers from Apple to Zara, Intu centres attract some 400 million customer visits every year.
Intu has a UK investment pipeline of £1.3 billion over the next ten years. Major projects due to be underway soon include the extension and refurbishment at intu Watford and leisure expansion at intu Lakeside.
Intu also has a growing presence in the Spanish market, owning two of Spain's top 10 centres: Parque Principado in Oviedo, and Puerto Venecia in Zaragoza, with development options on a further four sites in Malaga, Palma, Valencia and Vigo.
intu creates a compelling experience for its customers, both on and offline, delivering on its brand promise to provide the most digitally connected shopping centres, world-class service and events with a difference. National initiatives include the annual "Everyone's Invited" event which in 2014 increased footfall that weekend by an average of 13 per cent year on year. As a result, customers are coming more often and staying for longer, which in turn helps Intu's retailers to flourish.
Intu centres support almost 115,000 jobs across the UK, representing some 4 per cent of the UK's total retail workforce. Intu is fully committed to supporting its local communities and the wider environment and has received widespread recognition for its Corporate Responsibility achievements, including the coveted BitC CommunityMark.
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