Intu properties has completed the sale of 50% stake in its Derby shopping centre to Kuwaiti-backed Cale Street Investments. The closing of the transaction was subject to completing a senior debt financing of the centre and certain other completion conditions, including €166.7m (£150m) new debt financing that was raised in the joint venture with Deutsche Bank. The consideration amounted to €121.2m (£109m), after working capital adjustments. Intu will continue to manage the centre on behalf of the joint venture and receive asset management and brand licence fees for this, further enhancing Intu’s return from the transaction.
Matthew Roberts, chief executive of Intu, commented: “We are pleased to complete this innovative joint venture transaction in what is a challenging investment market in the UK. Cale Street’s equity represents a flexible and cheaper source of capital than intu’s own equity and other private equity financing sources considering investing in UK shopping centres today. This reduced cost is achieved in exchange for a priority of distributions to Cale Street. Whilst the transaction is earnings dilutive, the part-disposal of Intu Derby is evidence of our strategy to reduce debt through disposals and part-disposals both in the UK and Spain and the transaction crystallises value significantly above the look-through value of Intu Derby implied by the current share price.”