UK shopping centre owner and developer Intu has sold 50% of Intu Chapelfield in the English city of Norwich to LaSalle Investment Management for £148 mln (€169 mln).
LaSalle IM entered the 50:50 joint venture on behalf of Greater Manchester Pension Fund and West Yorkshire Pension Fund. The price represents a net initial yield of 5.0%.
'We look forward to working with LaSalle Investment Management on Intu Chapelfield which, since its opening in 2005, has firmly established itself as the prime retail destination in East Anglia,' commented Intu CEO David Fischel.
According to Intu, the consideration for the 50% interest is in line with the centre valuation at 31 December 2016 of £296 mln (€337 mln) and a small discount to the valuation at 30 June 2017 of £305 mln (€347 mln). The net rental income of the property was £15.5 mln (€17.7 mln) for the year ended 31 December 2016.
Intu Chapelfield is located in the centre of Norwich and a key retail destination in East Anglia, with an annual footfall of 12 million. The centre provides 90 units and includes key retailers such as House of Fraser, Apple, Zara, River Island, H&M and Boots.
Intu will continue to manage the centre on behalf of the joint venture. The closing of the transaction is subject to EU merger clearance.
According to Intu, the transaction further advances its stated strategy of introducing investment partners to its assets and recycling capital into its UK development pipeline. Intu will use the net proceeds of the transaction to repay debt on its revolving credit facility and to invest into its committed development pipeline.
'I am delighted with this investment that we have made on behalf of the Greater Manchester and West Yorkshire Pension Funds, and also to be partnering with intu. This is an acquisition that we believe will provide long-term value. It is a quality asset in an affluent catchment area, well-aligned with our strategy for UK investments,' concluded Tom Rose, fund manager at LaSalle IM.
