St. Modwen and Salhia sell Elephant & Castle Shopping center for £80 mln to Delancey and APG (UK)

Key Property Investments, a 50/50 joint venture between St. Modwen and Salhia Real Estate Company K.S.C , today announced that it has completed the sale of the Elephant & Castle Shopping Centre to Delancey and APG for £80 mln (approx. €96.56 million) in cash.

The sale price reflects a yield of 4.25% and is significantly above the asset’s current book value.

KPI acquired the Elephant & Castle Shopping Centre, a retail, leisure and office complex of 327,000 ft² (approx. 30,380 m²) in May 2002 for £29.25 million (approx. €35.3 million). The acquisition was in line with St. Modwen’s ongoing strategy to own income-producing assets which offer the potential to grow value through active asset management initiatives and, ultimately, redevelopment.

The proceeds will be used to reduce the debt held by the KPI joint venture against the shopping center and other jointly owned assets. Profits accruing to the Company from the sale will be in addition to St. Modwen’s previous profit expectation for the year to 30th November 2013.

Bill Oliver, Chief Executive, St. Modwen, said:

“For the last 11 years, we have significantly increased the value and potential of the Elephant & Castle Shopping Centre through strong asset management initiatives and we had also looked forward to redeveloping the Centre to drive a wider scale regeneration of the area.

“However, both St. Modwen and Salhia believe that the price offered fully reflects the potential of the scheme and provides certainty of exit, while crystallizing a significant profit for our shareholders. We believe this is a very positive outcome which also leaves us well placed in terms of capital and human resources to focus on our other significant regeneration projects in London and the regions.”

Commenting, Jamie Ritblat, CEO of Delancey, said:

“We are delighted to be continuing the delivery of a significant residential investment strategy in Elephant and Castle with such a high caliber partner as APG; particularly at a time, when the affordability of housing in London is an increasing concern.

“Combining an exceptionally well-connected Zone 1 location with Zone 3 pricing, Elephant & Castle is one of Europe’s foremost regeneration projects, and represents a hugely exciting project for us to be moving forward.”

St. Modwen will be issuing its pre-close announcement on Wednesday 4th December 2013.

Source: St. Modwen

Related News