Land Securities announces that it has signed share purchase agreements with Capital & Regional plc and AREA Property Partnership (UK) LLP to acquire a further 42% interest in the X-Leisure Unit Trust and 100% interests in X-Leisure Limited (the management company of the fund) and X-Leisure (General Partner) Limited for an estimated total cash consideration of £110.6 million (approx. €136.2 million) Land Securities currently owns a 12% interest in the X-Leisure Unit Trust.
The transaction is subject to:
- Approval from unit-holders who are not participating in this transaction to the transfer of the management company to Land Securities; and
- Capital & Regional shareholder approval for the sale of their interests in both the fund and the management company.
Land Securities' Executive Director Richard Akers said: "Leisure continues to be a growing element of our portfolio both organically and through acquisition. This transaction will further increase our reach and expertise in the sector. Today's announcement is an affirmation of our belief in the attraction of leisure and of our desire to be responsible for the management of assets where we hold a majority share.
"While we believe that the offer outlined in today's announcement represents a good deal for all involved, it is subject to unit-holder and Capital & Regional shareholder approvals so we can have no certainty that the purchase will go ahead. In the event that it does not, we would be happy to remain in the fund and have an active part in the discussion of its future as it nears expiry."
The total cash consideration represents an estimated price per unit of 34.0 pence compared with the last published valuation as at October 2012 of 37.3 pence. The consideration is subject to closing adjustments and the payment of dividends accruing on the units up to completion. In addition, Land Securities will pay £1m for the acquisition of the property management company.
As at 30 September 2012, the X-Leisure Unit Trust properties were valued at £580.6 (approx. €715.1 million). Net rental income was £28.0 (approx. €34.4 million) for the nine months to 30 September 2012. The last reported net initial yield was 6.32%.
The acquisition of 100% interests in X-Leisure Limited and X-Leisure (General Partner) Limited gives Land Securities day to day control of the assets in the X-Leisure Unit Trust. The portfolio comprises 16 schemes, totalling 3,1 million ft² of prime leisure and entertainment space. It is home to many of the leading leisure brands in the industry. The portfolio offers a full range of leisure and entertainment, including cinemas, two ski slopes, bars, restaurants, clubs, health and fitness and retail.
Leisure is an increasingly important part of Land Securities' retail portfolio and this transaction, if successfully completed, gives it a significant stake in a group of prime leisure assets.
Source: Land Securities