Intu Properties and Cale Street complete Derby JV– The shopping centre-focused real estate company, Intu Properties (INTU), and Cale Street Investments (Cale), an investment firm backed by the Kuwait Investment Office, the London office of the Kuwait Investment Authority, announced on 18 April 2019 that they were forming a joint venture that will own the Intu Derby shopping centre.
The closing of the transaction was subject to completing a senior debt financing of the centre and certain other completion conditions. It was announced this morning that these conditions have now been met and the transaction has completed.
The consideration payable to INTU by Cale was calculated by reference to the December 2018 book value of the centre of £372.5mn (100 per cent). Senior debt finance of £150mn was raised in the joint venture.
Matthew Roberts, CEO of INTU, had this to say: “We are pleased to complete this innovative joint venture transaction in what is a challenging investment market in the UK. Cale Street’s equity represents a flexible and cheaper source of capital than INTU’s own equity and other private equity financing sources considering investing in UK shopping centres today. This reduced cost is achieved in exchange for a priority of distributions to Cale Street.
Whilst the transaction is earnings dilutive, the part-disposal of intu Derby is evidence of our strategy to reduce debt though disposals and part-disposals both in the UK and Spain and the transaction crystallises value significantly above the look-through value of intu Derby implied by the current share price.”
About INTU
INTU owns and manages shopping centres in the UK and Spain. The company’s UK portfolio is made up of 17 centres, and in Spain they own three centres, with advanced plans to build a fourth. They focus on prime, high-footfall flagship destinations
According to the company, its centres attract around 400mn customer visits and 26mn website visits a year. Our strategic focus on prime, high-footfall flagship destinations. INTU’s centres support nearly 130,000 jobs (representing about 3 per cent of the total UK retail workforce).
INTU: Intu Properties and Cale Street complete Derby JV