Redefine International has exchanged contracts to purchase the Weston Favell shopping centre in the UK city of Northampton from Aviva Commercial Finance for £84 mln (€100 mln).

Redefine International has exchanged contracts to purchase the Weston Favell shopping centre in the UK city of Northampton from Aviva Commercial Finance for £84 mln (€100 mln).

Aviva will provide Redefine International with a finance facility of £50 mln, with the balance of the purchase price being funded from internal cash resources. The interest rate on this Aviva facility will be fixed at around 5.7% per annum and the loan will be repayable in November 2038.

Completion of the deal is expected for December 2013.

The deal is part of wider arrangements with Aviva relating to the company’s UK shopping centre portfolio. Redefine has refinanced debt provided by the insurer for the Grand Arcade shopping centre in Wigan as well as the West Orchards shopping centre in Coventry, reducing the group’s loan to value ratio from 63.7% to 57.3%.

The debt against the West Orchards property will be repaid in cash from the company’s existing cash reserves at the current market value of the property (£37 mln) and will result in the property becoming unencumbered.

The debt against the Grand Arcade property will be reduced by 50% to £73 mln in consideration for a cash payment of £7 mln. The company will assume 100% ownership, however Aviva will retain the right to participate in 50% of the income and capital growth generated by Grand Arcade in the future.

Following completion of the transaction, the facilities currently provided by Aviva with respect to two of the company’s other shopping centres, at Birchwood (Warrington) and Byron Place (Seaham) as well as Grand Arcade, will be cross collateralised with the facility to be provided for Weston Favell.