Quintain Estates and Development plc announces that it has agreed to invest £10.7 million (approx. 12.5 million) to acquire a 28% shareholding in Albemarle Retail Properties LLP, a newly created limited liability partnership.
ARP is a registered investment vehicle with £72 million of retail assets situated across the UK. Quintain's investment in ARP is structured to provide a 10% annual paid coupon and a priority return on exit. Quintain will provide strategic asset management advice to ARP and be a member of the Management Committee.
Quintain's equity will be financed out of existing cash resources and debt financing will be provided to ARP by The Royal Bank of Scotland.
ARP has been created through the merger of four existing Albemarle funds, managed by Egan Property Asset Management. Its assets comprises 105 predominantly retail units let to 95 different tenants with 70% exposure to UK multiples to include Waitrose, Boots, Burton Group and The Co-operative. The weighted average unexpired term throughout the portfolio is over 10 years.
Commenting on the investment David Gavaghan, Executive Director, Fund Management said: "This investment achieves a number of Quintain's objectives. It adds to our goal of reaching £1.25 billion of funds under management by the year end; it also creates a new Fund for Quintain and is consistent with our milestone target of investing in income producing assets. In terms of ARP, we are confident that we can create additional value as we combine our strategic asset management capabilities with those of the existing management team.
"This transaction also demonstrates the strength of Quintain's asset management and financing capabilities and its willingness to work with owners and financiers of active property portfolios where it sees the opportunity to create value in the medium term."