QIL : Qannas investing in London property
Qannas Investments, the fund specialising in investments in countries that are members of the GCC (the Gulf Co-operation Council) is investing £11m into a £50m project to refurbish 1 Palace Street. 1 Palace Street is intended to be a luxury residential property with a spa / health center and reception / concierge to provide 24 hours service to 72 ultra-luxury apartments. It is located just adjacent to Buckingham Palace and has views over the Queen’s back garden.
The deal structure is complicated so we have reproduced it below:
The deal comprises an investment into an “overall preferred equity issue of £50m (the “Issue”) by Palace Investors Holdings Limited (“PIHL”). PIHL is a special purpose vehicle incorporated for the development of 1 Palace Street (“1PS” or the “Project”)”…”Northacre plc (“NTA”), the AIM-listed property development company, is currently the development manager of 1PS. Holders of the preferred equity instrument are entitled to a preferred return of 15% of their investment per annum, payable from the realised value of the Project after the repayment of principal debt.”
“Abu Dhabi Financial Group (“ADFG”), the ultimate controlling shareholder of QIL’s investment manager, is the sponsor of the Project. ADFG is the investment manager of Palace Real Estate Partners LP (“PREP”), the controlling shareholder of PIHL. The Issue been arranged by Integrated Alternative Finance (“IAF”), a related company to ADFG, which is regulated by the Dubai Financial Services Authority. Jassim Alseddiqi and Mustafa Kheriba, directors of Qannas, are also directors of NTA, PREP and IAF. Jassim Alseddiqi is also a director of ADFG. On completion, PIHL will pay a fee to IAF of 0.75% of the value of the Issue.”
The independent members of the Board have said that they have consulted FinnCap and they think the terms of the deal are “fair and reasonable”.
Shareholders are not being asked to approve the deal