BAA, Morley sell airport assets for EUR 340m

The Airport Property Partnership (APP), a 50-50 joint venture between British airport group BAA and clients of Morley Fund Management, has agreed to sell a portfolio of 33 property assets to private airport hotel group Arora Family Trust for £265mln (EUR 340mln).

APP had originally hoped to sell its £1.2bn (EUR 1.7bn) in property assets in one portfolio but was unable to do so due to the turbulence in the financial markets. A sale of the entire non-core portfolio was seen as essential to re-finance the massive £10bn in debt incurred when Spanish infrastructure group Ferrovial acquired BAA, formerly the British Airports Authority, two years ago.

BAA has indicated it is continuing efforts to dispose of 35 warehouses, 17 development sites, offices and other properties.

BAA said on a statement that the sale of 31 of the properties is expected to close in the second quarter of this year. The transaction includes the forward purchase of two properties under development, which the BAA/Morley joint venture will fund to completion. The sale of these assets will take place later this year when they are completed.

The portfolio of 33 assets accounts for a about a quarter of APP’s total portfolio by value. BAA said the part of the proceeds from the transaction will be used to replay APP’s existing debt and the balance will be returned to BAA and Morley.

'The transaction is part of BAA's strategy to dispose of non-core assets, and represents the first stage in the sale of APP and BAA Lynton, BAA's property management company,' BAA said.

BAA was advised on this transaction by Morgan Stanley & Co Limited.