Freeport, a Carlyle real estate portfolio company and one of the leading developers and operators of outlet malls in Europe, announces the signing of a five year 172.5 million bank facility with Bank of America Merrill Lynch and the sale of its Roppenheim development in Alsace, France.
The facility and the proceeds of the disposal will provide Freeport with funds to expand its business and generate returns by investing in other opportunities, such as through the acquisition of distressed and/or non-performing assets, making use of the management's extensive specialist knowledge of investing in, and managing, retail outlet centers. Freeport will also look to grow through joint venture partnerships with existing owners of outlet malls, who will benefit from Freeport's experience and track record of managing and improving the performance of operational outlet malls across Europe.
Freeport has agreed to sell the Roppenheim site to MAB Development, the real estate development subsidiary of Rabobank. Since acquiring the 16ha 33a land plot in February 2008, Freeport subsequently achieved planning permission for a 250,000 ft² (23,100 m²) outlet mall and pre-let over 30% of the space to major international designer brands. MAB Development aims to continue the ongoing phases of construction and on completion, due in mid 2011, it will become a major retail centre for the region, creating over 600 jobs.
Iestyn Roberts, CEO of Freeport, said: "Since Carlyle acquired Freeport in 2007, we have experienced growth at our existing centres and are now positioning the business for further expansion, as European economies begin to recover. As the initial developer at Roppenheim, we have undertaken a number of significant value accretive activities, including achieving full planning permission for the site and pre-leasing over 30% of the space to major international retail brands. We continue to make strong operational progress across our malls in Sweden, Portugal and the Czech Republic, reflecting the counter cyclical qualities of outlet shopping centres. We are experiencing growth in footfall and in spend per consumer, which is driving strong performances at these centers."
Robert Hodges, Managing Director at The Carlyle Group added: "The disposal of Roppenheim allows us to crystallise the value and profit we have created to date, whilst still allowing MAB Development to generate its own returns by the future development of the site. This sale and the recently signed long term bank financing will enable us to deploy funds into opportunities around Europe and beyond, where we can create significant value. Freeport is now well positioned to increase its activities and we will take a flexible approach to new opportunities. We will consider a range of options which include the part injection of equity, working alongside operators and owners of existing assets which are in need of the specialist knowledge that Freeport offers, or through the acquisition of entire assets in need of significant improvement."
Marc Vaquier, Managing Director of MAB Development France, said: "Roppenheim offers us an opportunity to own and develop a major European outlet shopping centre, which benefits from a strategically important location which is already attracting major international tenants. We will continue to progress with the development, based on the existing approved plans, with construction expected to commence beginning 2010."