F&C REIT and Area buy Dawnay Day portfolio

F&C REIT Asset Management and Area Property Partners (formerly Apollo Real Estate Advisors) have teamed up to acquire Dawnay Day's 316,800 m² UK portfolio. With a transaction price of over £600 mln (EUR 657 mln), the purchase ranks as the largest real estate transaction so far this year and one of the largest deals since the onset of the credit crisis.

The much sought-after portfolio consisting of 211 properties was acquired by F&C REIT on behalf of its main investor, Trafalgar Overseas, and by Area on behalf of its Apollo European Real Estate Fund III. Retail properties make up 70% of the portfolio which includes landmark properties such as the Austin Reed store on London's Regent Street.

The portfolio was awarded to F&C REIT in December 2008 after a bidding process which is said to have attracted over 30 bids. Dawnay Day's property portfolio was placed into administration in 2008 after Norwich Union, Dawnay Day's primary lender, appointed BDO Stoy Hayward to undertake the administration for the £800 mln portfolio. DTZ, the property consultancy, is advising BDO on the sale.

'We were absolutely delighted to have secured the portfolio as there was plenty of interest in the market for it,' Leo Noe, executive chairman of F&C REIT Asset Management, said. Nick Criticos, CEO of F&C REIT Asset Management, added: 'When we merged F&C Investments Property business with REIT Asset Management last year, we felt that it was an opportunity to create a real estate business that could produce opportunities to launch new products and enhance the product offering for clients of both operations, and a mere four months on from the merger I believe that we have validated our statement of intent to do that with the purchase of the Dawnay Day portfolio.'