15th Mar 2005 10:33
15 March 2005 MAJOR UK REGIONAL SHOPPING CENTRE TRANSACTION WITH PRUDENTIAL Attached is a joint press release issued today by Liberty International PLC,Capital Shopping Centres PLC (a wholly owned subsidiary of LibertyInternational), Prudential Assurance Company Limited ("Prudential") andPrudential Property Investment Managers Limited ("PruPIM").Susan FolgerCompany SecretaryLiberty International PLC020 7887 7000 JOINT PRESS RELEASE BY PRUDENTIAL ASSURANCE COMPANY LIMITED ("PRUDENTIAL"), PRUDENTIAL PROPERTY INVESTMENT MANAGERS LIMITED ("PRUPIM"), LIBERTY INTERNATIONAL PLC ("LIBERTY INTERNATIONAL") AND CAPITAL SHOPPING CENTRES PLC ("CSC") 15 MARCH 2005 This statement may contain certain "forward-looking statements" with respect tocertain of Prudential and Liberty International's plans and their current goalsand expectations relating to their future financial condition, performance, results, strategy and objectives. Statements containing the words "believes", "intends", "expects", "plans", "seeks" and "anticipates", and words of similar meaning, are forward-looking. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Prudential or Liberty International's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, the impact of competition, inflation, and deflation; experience in particular with regard to mortality andmorbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Prudential or Liberty International and their affiliates operate. Thismay for example in the case of Prudential result in changes to assumptions usedfor determining results of operations or re-estimations of reserves for future policy benefits. As a result, Prudential or Liberty International's actual future financial condition, performance and results may differ materially from the plans, goals, andexpectations set forth in Prudential or Liberty International's forward-looking statements. Prudential and Liberty International undertake no obligation to update the forward-looking statements contained in this statement or any other forward-looking statements they may make. MAJOR UK REGIONAL SHOPPING CENTRE TRANSACTION INVOLVING PRUDENTIAL AND LIBERTY INTERNATIONAL Prudential and PruPIM, both wholly owned subsidiaries of Prudential plc,Liberty International and CSC, a wholly owned subsidiary of LibertyInternational, have concluded a transaction, the principal provisions of whichare as follows: * The Liberty International group has acquired or agreed to acquire from Prudential its entire unitholding in Jersey unit trusts owning 50 per cent of the Prudential group's overall interests in * The Mall at Cribbs Causeway, Bristol and associated properties * the Manchester Arndale Shopping Centre and associated properties for an aggregate consideration of ‚£653 million based on market values as at 31December 2004.Liberty International will settle the consideration from its existing cashbalances and committed bank facilities. Completion in the case of ManchesterArndale is expected shortly once final landlord approval is confirmed. * Under the terms of the transaction, PruPIM is to continue as asset manager for these properties on behalf of the joint owners, as well as for the completion of the ‚£150 million Manchester Arndale extension which is currently underway and due to open in phases between October 2005 and the end of 2006. The consideration takes into account Prudential incurring the costs of completion of the Northern Extension. * Furthermore, Prudential and CSC will seek to develop future areas of co-operation, including accessing, where appropriate, the potential advantage from their combined scale in such areas as commercialisation and procurement; and by jointly investigating, where appropriate, future shopping centre investment, development and management opportunities. David Fischel, Chief Executive of Liberty International, commented:"We are pleased to have entered into this transaction with Prudential andPruPIM which enables them to meet their objective of achieving greaterdiversification in their real estate holdings while also meeting LibertyInternational's strategic objective of investing in prime UK regional shoppingcentres and increasing the scale and geographic spread of our activities. Welook forward to attractive returns from these significant interests in The Mallat Cribbs Causeway and Manchester Arndale, which are acknowledged as highlysuccessful UK regional centres, enabling us to extend our long track record ofprofitable expansion. We also look forward to considerable mutual benefits froma close working relationship in the regional shopping centre industry betweenLiberty International, CSC, Prudential and PruPIM."Martin Moore, Managing Director of PruPIM, commented:"We are delighted to have achieved our objective of introducing another partnerinto these two major shopping centre interests and look forward to working withLiberty International and CSC whose long term investment approach andmanagement expertise make them an ideal joint owner of these prime regionalshopping centre interests. Between CSC and Prudential we have a substantiallevel of ownership and presence in the UK's top 25 shopping centres."Additional details concerning the transaction are attached to this pressrelease.Enquiries:Liberty International PLC: David Fischel Chief Executive +44 (0)20 7960 1207 John Abel Director, +44 (0)20 7887 7057 Managing Director of Capital Shopping Centres PLC Public relations (Liberty International): UK: Michael Sandler, +44 (0)20 7796 4133 GCG Hudson Sandler SA: Matthew Gregorowski, +44 (0)20 7457 2020 College Hill Associates Nicholas Williams, +27 (0)11 447 3030 College Hill Associates Prudential Martin Moore Managing Director 020 7548 6571 Chris Taylor Director: Portfolio 020 7548 6911 Management Public relations (Prudential): Jane Batten PR and Communications 020 7548 6632 Manager ADDITIONAL DETAILS OF THE TRANSACTIONTHE MALL AT CRIBBS CAUSEWAY, BRISTOL is the only out of town regional shoppingcentre in the South West region. Seventy per cent of the visitors are in theABC1 profile with a high average spend. The overall retail offer at CribbsCauseway extends to some 1.5 million sq ft of high quality retail as the Mallitself is combined with complementary open A1 retail warehousing, foodsuperstores, leisure park and restaurants. The destination is supported by10,000 free car parking spaces.Retail Area: 750,000 sq ft/69,678 sq m Number of Shops: 135 Key Anchor Stores: John Lewis, Marks and Spencer, Next, Boots, BHS, WHSmith and H&M Footfall 13,195,000 per annum Statistics: Website: www.mallcribbs.com MANCHESTER ARNDALE SHOPPING CENTRE. The completion of the northern extension toManchester Arndale will create the largest in-town shopping centre in the UK.The investment of over ‚£150 million in the Northern Extension is creating anadditional 85 new shops and restaurants to include Next, Waterstones and VirginMegastore. Floorspace will increase by 550,000 sq ft to 1,400,000 sq ft intotal.The new malls will connect with the newly refurbished and revitalised HalleSquare, creating a natural twin-level pedestrian circuit round the wholecentre. The range of units available will offer modern flexible retail space,with scope for large stores and opportunities for smaller retailers alike.Retail Area: 850,000 sq ft/78,967 sq m A further 550,000 sq ft/51,096 sq m under construction Number of shops: 130, with a further 85 under construction Key Anchor stores: Boots, Next, BHS, Littlewoods, Top Shop, WHSmith, Argos, Dixons and New Look Footfall 27,389,000 per annum Statistics: Website: www.manchesterarndale.com TENUREThe Mall at Cribbs Causeway is held under a 500 year leasehold interestproviding around a 66 per cent share of the rents from the centre. ManchesterArndale will on completion be held under a 200 year leasehold interest fromManchester City Council expected to provide around 95 per cent of the rentsfrom the entire scheme following the completion of the Northern Extension.ASSOCIATED PROPERTIESAssociated properties also now held or to be held jointly under the transactioninclude * in Bristol, the Retail Park at Cribbs Causeway, a 212,000 sq. ft. Retail Park with ten units let to tenants such as Argos, Currys and JJB Sports. The Retail Park has over 700 free car parking spaces and benefits from an open A1 planning consent. The Retail Park is a freehold interest and was developed in two phases by Prudential in the mid to late 1980s, and * in Manchester, a 90 per cent leasehold interest in the 200,000 sq.ft. retail component of New Cathedral Street , a recently developed mixed use property in an open street format situated close to Manchester Arndale. New Cathedral Street is anchored by Harvey Nichols (who hold a ground lease) and eight other shops and stores including Zara, Heals, Austin Reed, Hobbs, Ted Baker and Reiss. VALUATION YIELDS AND PASSING RENTSThe nominal equivalent yields used for the transaction based on the marketvalues at 31 December 2004 were 5.5 per cent in the case of The Mall at CribbsCauseway and a range from 5.6 per cent to 5.75 per cent in the case ofManchester Arndale. Net income passing rents at 31 December 2004 attributableto the joint ownership interests amounted to ‚£24.5 million in the case of TheMall at Cribbs Causeway and associated properties and ‚£23.3 million in the caseof Manchester Arndale and associated properties, save that, in the case ofManchester Arndale, the Jersey unit trust has been guaranteed a minimum yieldof 5 per cent until the Northern Extension is income producing followingcompletion when the estimated net income passing rents are anticipated toexceed the guaranteed minimum.PRUDENTIALPrudential Property Investment Managers Ltd ("PruPIM") is a part of M&G, theinvestment arm of Prudential plc in the UK. As such, it is responsible forinvesting in and managing property investment portfolios on behalf ofPrudential. It has ‚£14.8 billion of funds under management and is one of thelargest property investment managers in the UK.PruPIM manages a UK retail portfolio comprising in excess of ‚£3 billion ofshopping centres, almost ‚£2 billion of high street retail outlets and more than‚£1 billion of retail warehousing. This comprehensive exposure gives the companyan unrivalled insight into retail markets.LIBERTY INTERNATIONAL is the UK's third largest listed property company and aconstituent of the FTSE-100 index with a market capitalisation around ‚£3.1billion.CAPITAL SHOPPING CENTRES PLC ("CSC"), a wholly owned subsidiary of LibertyInternational, is the leading property company in the UK specialising in theownership, management and development of regional shopping centres. In additionto the assets acquired under this transaction, CSC owns three of the UK's majorout-of-town regional shopping centres; Lakeside, Thurrock; MetroCentre,Gateshead; and Braehead, Renfrew, Glasgow; together with six major in-townregional centres in Newcastle, Nottingham, Watford, Bromley, Uxbridge andStoke-on-Trent; and is engaged on a substantial development programme involvingboth new city centre schemes in Norwich, Cardiff and Oxford, and extensions andimprovements to existing shopping centres.Including the transaction referred to in this announcement, the LibertyInternational group's regional shopping centre interests now exceed ‚£5 billionby market value.In addition to CSC, Liberty International owns Capital & Counties, a propertycompany with some ‚£1 billion of retail and commercial properties in the UK andUSA. The group's USA assets are predominantly in California, where some $500million is invested in regional shopping centres and other retail properties.NATIONAL TOP 25 SHOPPING CENTRES RANKED BY OVERALL ATTRACTIVENESS2004 Scheme Location Gross Area Interest held Rank by Prudential (Sq.Ft) and/or CSC 1 Bluewater Dartford - 1,610,000 Prudential Greenhithe (35%) 2 MetroCentre* Gateshead 1,598,000 CSC (90%) 3 Meadowhall Sheffield 1,453,000 - 4 Lakeside Shopping Centre Grays - Thurrock 1,377,000 CSC (100%) 5 The Trafford Centre Manchester - 1,400,000 - Trafford 6 Merry Hill Centre Brierley Hill 1,500,000 - 7 The Centre: MK Milton Keynes 1,300,000 Prudential (36%) 8 Eldon Square Shopping Newcastle-upon-Tyne 961,000 CSC (45%) Centre 9 Whitgift Centre Croydon 1,236,000 - 10 Festival Place Basingstoke 850,000 - 11 Brent Cross Shopping London - Hendon 855,000 - Centre 12 The Harlequin Watford 721,000 CSC (93%) 13 The Mall at Cribbs Bristol - Cribbs 725,000 Prudential/CSC Causeway Causeway (66%) 14 Bullring Birmingham 1,200,000 - 15 The Telford Shopping Telford 1,000,000 - Centre 16 The Victoria Centre Nottingham 807,000 CSC (100%) 17 The Arndale Shopping Luton 850,000 Prudential Centre (90%) 18 Braehead Shopping and Glasgow - Braehead 800,000 CSC (100%) Leisure Centre 19 Kingfisher Shopping Redditch 1,000,000 - Centre 20 Queensgate Shopping Peterborough 807,000 - Centre 21 Arndale Centre** Manchester 850,000 Prudential/CSC (95%) 22 WestQuay Southampton 818,084 - 23 Almondvale Shopping Livingston 550,000 - Centre 24 The Glades Bromley 421,000 CSC (63%) 25 White Rose Shopping Leeds 650,000 - Centre * Survey conducted prior to Red Mall extension completed in Autumn 2004 increasing the size of MetroCentre to 1.8 million sq.ft. ** The rank of Manchester Arndale is expected to rise substantially in 2007 on completion of the Northern Extension increasing the size to 1.4m sq.ft. Source: Churston Heard and TW Research Associates 2004 --- Ends --- ENDLiberty International plcRelated Shares:
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