CLS Holdings announces that it has exchanged contracts for the unconditional sale of the site of its proposed mixed-use Vauxhall Square development to R&F Properties, a large Chinese property developer listed on the Hong Kong Stock Exchange, for a gross consideration of €184.9m (£157.77m).
R&F Properties will assume CLS's obligations for the relocation of the hostel at 62 Bondway, resulting in a net consideration of €168.9m (£144.1m), which will be received in cash at completion. It is expected that completion will be on or around 4 May 2017. The Company will retain the freehold interest in the Miles Street student accommodation block (having sold a long leasehold interest for €29m in December 2015) and residential houses in Wandsworth Road.
At 31 December 2016, Vauxhall Square was valued at €117.2m (£100m) and in 2016 generated net rent of €2.2m (£1.9m). The rent has since reduced to €0.12m (£0.1m) p.a. following the expiry of a lease with Cap Gemini.
CLS will make a profit on disposal of approximately €46.8m (£40m) after costs, which will add some 70 pence to pro forma EPRA NAV. There is no debt secured against the site and it is anticipated that the full sale proceeds will be re-invested in the Company's core business.
Henry Klotz, Executive Chairman of CLS, commented: "The sale of Vauxhall Square is a milestone in the history of CLS. Having bought the site nearly 30 years ago and secured planning in 2013, we are pleased now to have exchanged contracts at a price above its year end valuation. R&F Properties has extensive residential development experience and we are delighted that it will soon create a vibrant residential, office and retail development to enhance Vauxhall, an area in which we retain over €386.8 (£330m) of long-term investments.We intend to reinvest the proceeds in our core business: high yielding offices with good asset management opportunities within key European cities"