The Arlington Business Parks Partnership sells HQ and announces amendments to CMBS facility (UK)

Arlington Business Parks Partnership Fund (ABPP) is pleased to announce two new strategic initiatives for the Fund.

Verizon Reading Int Bus Park

Verizon's HQ facility at Reading International Business Park.

Sale of Verizon
A sale price in excess of £140 million (approx. €162.9 million) was agreed for the HQ facility, which comprises phases I and II of Reading International Business Park, and is let to global communications provider Verizon for 10 years and houses its European headquarters.

ABPP, which is managed by Goodman and operated by Legal & General Property, will retain the adjacent land for Phase III of the Park, which will provide up to 300,000 ft² (approx. 27,870 m²) of office space for pre-let opportunities.

Paul Edwards, Director, Legal & General Property, said: "This sale is consistent with our ongoing strategy of concentrating on providing a good balance of high quality investment assets and development opportunities across the ABPP fund to service the needs of our investors.

"It clearly demonstrates that despite uncertain economic times, there is still good demand from investors for high quality out-of-town office developments and is a resounding endorsement from an overseas investor as to the strong underlying fundamentals that the Thames Valley offers."

Jim Johnston, Managing Director UK Business Parks, said: "Despite the challenging economic climate we are beginning to see the re-emergence of the big pre-let, with evidence of tight grade-A office supply in some locations across the UK. This sale will help to rebalance the distribution of assets in the ABPP fund, helping to maintain an efficient capital structure and a strong financial position.

"The proceeds will be recycled as part of an on-going strategy to enhance investor returns and help to facilitate future commercial development opportunities across our 8 million ft² consented land bank on a pre-let basis.

"We are currently on site with over £100 million of committed development to Centrica at Oxford Business Park, Greater Manchester Police at Manchester Central Park and other opportunities are expected to come forward in the near future."

CMBS update
ABPP's £800-million CMBS, issued by Epic Opera (Arlington) Limited, in August 2007 has subsequently been paid down through a combination of voluntary prepayments and asset sales to £401.7 million of outstanding loans as at July 28, 2011.

Under the terms of the agreement, ABPP at its election may request a two year extension of the repayment date from July 2012 to July 2014, subject to meeting criteria including Loan to Value, Interest Cover and Net Worth covenants.

Amendments to the extension conditions have been agreed at no incremental cost to ABPP and substantially reduce any risk of non compliance.

In consideration to these amendments, ABPP has agreed to reduce the outstanding CMBS loans from £401.7 million to £300 million by January 2012 and £275 million by April 2012. However, the net proceeds from the sale of Verizon's HQ at Reading International will now be applied to reduce the outstanding loans to circ

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