UK REIT Land Securities has completed the acquisition of a controlling stake in a fund that owns 16 entertainment and recreational properties in the UK.
UK REIT Land Securities has completed the acquisition of a controlling stake in a fund that owns 16 entertainment and recreational properties in the UK.
The investment volume for the aquisition of a 42% stake in the X-Leisure Unit Trust and its management business comes to £112 mln (€135 mln). The deal increases Land Securities' holding in the X-Leisure Fund to 54%.
The X-Leisure Unit Trust properties comprise 945,000 m2 of leisure and entertainment space and were valued at £595 mln (€714 mln) at end-December 2012, including debt of £300 mln. Gross rental income was £40.5 m and the last reported net initial yield was 6.1%.
The vendors of the stake are London-listed Capital & Regional and Area Property Partnership.
The acquisition of the 100% interests in X-Leisure Limited management business and X-Leisure (General Partner) Limited gives Land Securities day-to-day control of the assets. The portfolio consists of cinemas, two ski slopes, bars, restaurants, clubs, health and fitness and retail. Land Securities already held a 12% interest in the X-Leisure fund.
The X-Leisure fund's former CEO PY Gerbeau decided to step down and leave the business to take on new challenges.
'Leisure is increasingly being treated as an essential element of the UK consumers' habits and as we enhance our shopping centres by broadening their leisure offer, today's deal gives us unparalleled reach with the major operators,' said Richard Akers, executive director at Land Securities.
He added: 'We have been clear that we would look to increase the proportion of leisure in our business and today's announcement is further evidence of our plan to align our Retail Portfolio with the modern demands of the consumer.'
Capital & Regional said it intends to use part of the disposal proceeds to buy back its own shares.
