Land Securities has agreed to acquire an additional 35.6% interest in the X-Leisure Unit Trust for a total cash consideration of £104 million (approx. €124 million), taking its total ownership of the Trust to 95%.
The deal follows Land Securities’ decision in January this year to take a controlling stake in the Trust, the UK’s largest leisure fund, with assets valued at £590 million as at August 2013, annualized net rental income of £39.6 million, and a net initial yield of 6.35%.
Land Securities’ Executive Director Richard Akers said: “18 months ago Land Securities had no major standalone leisure assets. Today we are the UK’s biggest leisure landlord with significant exposure to a sector which is seeing strong occupational demand. We have gained control of X-Leisure without paying a premium.”
Land Securities acquired its initial 12% holding in the Trust in 2012 and extended its ownership to 54% in January this year with the purchase of a 42% interest together with 100% interests in the Trust’s management companies, X-Leisure Limited and X-Leisure (General Partner) Limited. A further 5.4% was acquired in March.
The Trust was scheduled to expire in December 2014. In July 2013 a resolution was passed to extend the life of the Trust for a further five years, triggering an option for unit holders to retire their holdings. The majority of unit holders exercised that right. Land Securities’ acquisition of the additional 35.6% of the Trust is unconditional and completion is expected to take place by no later than September 26, 2013.
Land Securities will acquire the majority of the units of the retiring unit holders, which include funds managed by LaSalle, Scottish Widows Investment Partners, and Royal London. The total cash consideration of £104 million represents a price per unit of 37.96 pence compared with the last published valuation as at August 2013 of 38.13 pence. The average price paid for all units owned is 35.58 pence.
The X-Leisure portfolio comprises 16 schemes, totaling 3.1 million ft² of prime leisure and entertainment space, including X-scape in Milton Keynes and Brighton Marina. It is home to many leading leisure brands. The portfolio offers a full range of leisure and entertainment, including cinemas, two ski slopes, bars, restaurants, clubs, health and fitness and retail.
Source: Land Securities