UK - AREA Property Partners and F&C REIT Asset Management have bought struggling investment firm Dawnay Day's UK property portfolio for approximately £600m (€647m).
A joint investment vehicle between Apollo European Real Estate Fund III, managed by AREA Property Partners, and Trafalgar Overseas Ltd, managed by F&C REIT Asset Management, is in the process of buying the portfolio of 211 properties.
Nick Criticos, chief executive of F&C REIT Asset Management, said: "Our complementary skills, strengths, outlook and ambition is what secured the deal, which looking back on 2008 is one of the biggest property transactions carried out for some time."
Dawnay Day's property portfolio was placed into administration last year when Norwich Union, Dawnay Day's main lender, appointed BDO Stoy Hayward to manage the then £800m portfolio.
F&C REIT Asset Management, which manages the investment vehicle of both parties, was chosen as the preferred bidder of the properties in December 2008.
The transaction is due to be completed by the end of the month.
The portfolio represents 3.4m sq ft, of which 70% is retail space, and includes the Austin Reed store on London's Regent Street.
Norwich Union has also agreed to provide F&C REIT with £500-550m of debt through a new loan agreement.
The Apollo European Real Estate Fund III closed in March last year with approximately $1.4bn of committed capital. AREA Property Partners said it aims to invest 30-40% of the fund in UK commercial real estate.
AREA Property Partners, formerly Apollo Real Estate Advisors, is an international real estate investor and fund manager for government and corporate pension funds, sovereign wealth funds, insurance companies and endowments. Its funds have invested in over 450 transactions valued in excess of $40bn.
F&C REIT Asset Management was created in September 2008 when REIT Asset Management Ltd joined the UK and Irish property firm F&C Asset Management plc. It currently has £8.5bn in assets under management and operates in the UK, Ireland Germany, India, Israel and Sweden.
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