Capital & Regional plc, the co-investing property asset manager, has announced that the X-Leisure Fund has acquired Xscape Castleford and Xscape Milton Keynes from its partnerships with clients of Rockspring Property Investment Managers Limited and consequently the X-Leisure Fund has grown to over €1,255 million (£900 million) gross assets.
For Capital & Regional this is a merger of its partnership interests into the X-Leisure Fund. Its total exposure to leisure remains unchanged but diversified over a larger portfolio. Its two partnership interests are exchanged for 29.1m units in the X-Leisure Fund, increasing its share of the fund from 10.6% to 20.02%.
At the latest published X-Leisure unit price the partnerships, which are both managed by C&R, received a gross value of £192 million for the two properties, substantially in excess of the £179 million valuation at 30 June 2006. C&R owned 50% of Milton Keynes and 66.7% of Castleford. Construction started on Milton Keynes in 1998, and over the period since C&R has made a total profit on its share of the two developments of £36.7 million.
From the partnership's viewpoint the total consideration has been satisfied by the issue of 29.1m X-Leisure units to C&R, a contract for difference for a further 14.6 X-Leisure units issued to a client of Rockspring, cash of £16 million issued to another client of Rockspring and debt and working capital of £99 million.
PY Gerbeau, Chief Executive of X-Leisure, commented: "We are delighted to merge the ownership and management of the majority of Capital & Regional's leisure interests in a single powerful vehicle, giving greater focus and clarity of the X-Leisure and Xscape brands to business partners and investors alike. Leisure destinations have grown phenomenally in popularity over the past few years, both with consumers and investors. The success of our business model focuses on providing our customers with a unique leisure experience, in association with partnerships with key brands and business partners. It also provides our investors with opportunities to diversify their exposure to include leisure property. This unique approach to the leisure industry, supported by strong and key partnerships, has driven over fifty million visitors a year to our destinations. Plus, our high performing portfolio combined with an established track record forms a solid foundation for the market's long-term faith in our business model and leisure property".
Robert Palmer, Director of Rockspring Investment Managers Limited, said: "Having been an investor in Xscape for six years, we are pleased to have now been given this opportunity to broaden and diversify our investment into the wider X-Leisure Fund, and through the innovative structure that has been devised, we look forward to being part of its ongoing growth and success".
Alasdair Evans, Fund Director of X-Leisure, commented: "Xscape Milton Keynes and Xscape Castleford are two of the best leisure facilities in the UK which will help the X-Leisure Fund to improve growth, diversity and outperformance. We have broken new ground in two areas. The institutional asset class of leisure has been broadened to include real snow ski slopes; and property derivatives have been used to effect an asset-specific transaction for the first time. We intend to grow assets to £1.5 billion over the next five years through the acquisition of new properties and the introduction of new investors."
Source: Capital & Regional