Land Secs takes control of EUR 714m UK leisure portfolio

UK REIT Land Securities is taking 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 £110 mln (EUR 135 mln).

The X-Leisure Unit Trust properties comprise 945,000 m² of leisure and entertainment space and were valued at £580 mln (EUR 714 mln) at end-September 2012. Net rental income was £28 m and the last reported net initial yield was 6.3%.

The vendors of the stake are London-listed Capital & Regional and AREA Property Partnership. The transaction is subject to approval by the fund's other unit holders and shareholders of Capital & Regional, the current manager of the fund.

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.

Richard Akers, executive director at the UK REIT, said: 'Leisure continues to be a growing element of our portfolio both organically and through acquisition. This transaction will further increase our reach and expertise in the sector. Today's announcement is an affirmation of our belief in the attraction of leisure and of our desire to be responsible for the management of assets where we hold a majority share.'