UK property co-investing asset manager Capital & Regional has announced that the Junction Fund has agreed to sell the St Georges Retail Park in Leicester for £32 mln (EUR 38 mln) to help reduce the fund's debt.
UK property co-investing asset manager Capital & Regional has announced that the Junction Fund has agreed to sell the St Georges Retail Park in Leicester for £32 mln (EUR 38 mln) to help reduce the fund's debt.
The retail park has been sold to a fund managed by JP Morgan Asset Management in conjunction with operating partner Kirkstone.
Capital & Regional, which asset manages the Junction Fund, said the proceeds will be used to reduce the fund's overall debt, cutting the loan-to-value ratio by around 50 basis points. The Junction Fund, Capital & Regional added, is considering all options including a possible restructuring of the fund, 'in order to provide it with a viable future and a stable capital structure'.
The Junction Fund was formed in January 2002 and invests in retail parks throughout the UK. The major shareholders are Capital & Regional, Aviva Investors and Hermes. Jointly they own 90% of the fund.
At end-June this year, the fund had gross assets of £994.6 mln, and total debt of £587.5 mln. The fund's portfolio comprised 16 assets, giving an initial yield of 4.95%. In terms of performance, the fund with gearing has delivered -6.5% over the last three years, compared to the IPD benchmark of 2.8%. The properties within the fund delivered 0.3% over the last three years to end-June 2008.
