Gresham House plc (GHE.L) has announced two significant conditional property transactions: the sale of the Group's investment property interests in Vincent Lane, Dorking, and the sale of Gresham's property interests on Speke Boulevard, Speke, Liverpool.
An agreement has been signed with Linden Limited for the sale of the Group's investment property interests in Vincent Lane, Dorking for a consideration of £8.2 million (c. €11m) conditional only upon planning permission being granted for residential development by November 2008. The property is currently held through the Company's wholly owned subsidiary Wolden Estates Limited.
For the year ended 31st December, 2006 this investment produced rental income of £224,000 and it was valued in the Group accounts at 31st December, 2006 at £2.9 million. It is envisaged that, when received, the sale proceeds will be utilised for working capital purposes.
Under a separate transaction heads of terms, which do not constitute a legally binding commitment at this stage, have been signed with another third party for the sale of Gresham's property interests on Speke Boulevard, Speke, Liverpool for a consideration of £61 million (c. €81m) or 85% of market value whichever is the higher, conditional upon planning permission being granted for change of use to A1 retail. As at 31st December, 2006 these interests were valued in the Group accounts at £9 million. The heads of terms include a provision that planning permission must be obtained within 5 years from the date of Gresham obtaining shareholder approval. This proposed sale will now be put into solicitors' hands to prepare formal contracts.
As the proposed Speke transaction falls within Rule 10.5 of the Listing Rules, shareholder approval will be required. An explanatory circular will be sent to shareholders in due course once formal contracts have been agreed together with a Notice convening an Extraordinary General Meeting of the Company.