LONDON, October 6, 2011 /PRNewswire/ --
Arlington Business Parks Partnership
Fund (ABPP) is pleased to announce two new strategic initiatives
for the Fund.
- The completion of the sale of Verizon's 392,000 sq ft office
headquarter's (HQ) complex at Reading International Business Park
to overseas clients of RREEF
- Amendments to CMBS loan covenants securing the option to
extend the loan maturity from July
2012 to July 2014
Sale of Verizon
A sale price in excess of GBP140
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 sq ft 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 sq ft consented land bank on a
pre-let basis. We are currently on site with over GBP100 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 GBP800m 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 GBP401.7m of outstanding loans as at 28 July 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 GBP401.7m to
GBP300m by January 2012 and
GBP275m 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 circa GBP270m in October
2011.
ABPP will seek to further reduce the loans to GBP200m during 2013 and note that there are no
default consequences if loan reductions are not delivered.
James Cornell, CFO for Goodman in
the UK, said: "The proceeds of the sale reduce leverage and provide
certainty that the remaining CMBS debt can be extended, if
required, to July 2014. Utilising
these sale proceeds, ABPP will have repaid circa GBP530m of the GBP800m CMBS issued in August 2007. The resulting financial flexibility
places ABPP in a very strong position to deliver enhanced risk
adjusted returns."
Strutt and Parker advised ABPP, with the purchaser advised by
DTZ and RREEF, the real estate investment management business of
Deutsche Bank's Asset Management division.
About Arlington Business Parks
Partnership
The Arlington Business Parks Partnership fund (ABPP) is a UK
business park fund created in 2003, which is owned by investment
partners Goodman, Legal & General Property, Prudential and
Adia. ABPP owns a unique portfolio of high quality business parks
in a managed environment located across the UK.
About Goodman Group (ASX: GMG)
Please visit: http://www.goodmanbusinessparks.co.uk /
http://www.goodman.com
For further information on Goodman please contact:
Joanna Spinks +44-20-7269-9348 jo.spinks@fticonsulting.com
Richard Stocks +44-20-7269-9355 richard.stocks@fticonsulting.com