The delayed sale of Plantation Place, the big office development in the heart of the insurance district of the City, has gone through, much to the relief of stakeholders Schroder Real Estate and Stobart Group.
The development, built on the site of Plantation House, once the centre of the world's tea trade, has been bought by an investment vehicle controlled by Brazilian banking mogul Moise Safra for around £470m, giving an implied yield of around 5.5%.
Plantation Place, which houses the headquarters of insurance giant RSA, was owned by One Plantation Place Unit Trust (OPPUT). As a result of the sale of OPPUT, Schroder Real Estate Investment Trust will trouser £11.73m from the sale of its 28.9% stake while Stobart Properties, a subsidiary of logistics firm Stobart Group, will pocket £8.1m from its 20% stake.
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Andrew Sykes, Chairman of Schroder Real Estate, said: "Realising the investment in Plantation Place was identified as a key initiative to be implemented by Schroders following its appointment as investment manager [of OPPUT] in January 2012. As well as being significantly accretive to NAV [net asset value], the proceeds of the disposal provide the company with increased operational flexibility to pursue its key strategic objectives of improving dividend cover and achieving balance sheet efficiency."
The company's investment in OPPUT was held at nil in its most recent NAV announcement, made on April 25th 2012, as at that point there was no certainty that the disposal would complete.
If reflected in the company's NAV as at March 31st 2012, the net proceeds would generate a 7% uplift, taking it from £167m, or 46.9p per share, to £178.7m, or 50.2p per share.
The proceeds from the sale sit outside of the loan security pool and increase total cash held by the company to £38.7m. In addition, the transaction reduces the company's overall net loan to value ratio from 41% to 38%.
JH
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