Raven Russia Limited has signed a conditional sale and purchase agreement to purchase Karta Realty Limited, the ultimate owner of the Southgate warehouse project in the Domodedovo district of Southern Moscow, close to the international airport.
The Southgate project comprises a completed grade-A warehouse complex of 76,550 m², currently 88% let to John Deere, and 88 hectares of permitted land capable of producing a further 440,000 m² of completed logistics space once fully developed.
Karta Realty Limited is majority owned by two limited partnerships, one registered in Delaware and the other in England and Wales, managed by Cypress Grove International ('CGI'). CGI has been advised by Renaissance Capital.
The purchase price for the acquisition is US $54.5 million (approx. 39.5 million), the gross value of property and land being US $99.3 million.
Existing debt facilities of approximately US $43.5 million with Unicredit will be acquired with the Group. The facilities are for a five-year term from December 2006 with a margin of 650 basis points over US Libor. Terms to roll over the facility for a further five years have been agreed with Unicredit, reducing the margin to 430 basis points over US Libor on meeting letting criteria.
The purchase price implies an ERV yield of 13.7% on the completed property and a capital value of US $840/m². Net operating income on the let space generates US $6.4 million per annum.
Consideration will be satisfied by the issue of up to 25.9 million ordinary shares in Raven Russia Limited (at the election of selling shareholders) and the balance in cash. The purchaser has agreed certain share sale restrictions.
The principal condition of the acquisition involves the right of a minority shareholder group to match any formal offer for Karta Realty Limited made by a third party. If this right to match is exercised within 30 business days after the signing of this sale and purchase agreement then CGI will be obliged to sell Karta Realty Limited to the minority shareholder group.
Glyn Hirsch, Chief Executive Officer, said: "This potential acquisition consolidates our position as the major owner and supplier of grade-A logistics warehouse space in Moscow.
"Coupled with our existing Moscow permitted land holdings we now have the ability to bring almost 500,000 m² of completed space into the currently tightly supplied market".
Source: Cardew Group