Top deals Week 8 (18-22 February 2008)

The agreement by Belgian listed property company Cofinimmo to buy French company Medimur, the owner of clinics and nursing homes in France, for just under EUR 230 mln heads the list of deals* for Week 8.

* Deals in which the financial details were given

Top deals Week 8 2008

1. Cofinimmo buys France's Medimur for EUR 229m

2. New Star UK fund sells London office for EUR 170m

3. Apollo RE acquires Legnano property

4. Befimmo disposes of semi-industrial portfolio

5. White Rock fund buys Dutch portfolio

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Scroll down for the stories

1)

Cofinimmo buys France's Medimur for EUR 229m
Date published: 18 February 2008

Belgian listed property company Cofinimmo said it has agreed to buy French company Medimur, the owner of clinics and nursing homes in France, for an investment of EUR 229 mln. As it bolsters its healthcare property investments, the company said it is also purchasing three more nursing homes around Brussels for EUR 18.6 mln.

Cofinimmo said Medimur owns 14 aftercare and rehabilitation clinics along with six psychiatric clinics and 12 nursing homes. The 32 care institutions comprise 2,473 beds and total floor space of 128,000 m² and are operated by the Korian (21 institutions) and Méditer groups (11 institutions). The leases have average residual terms of 6.5 years (Korian) and 11.5 years (Méditer). This portfolio has an initial yield of 6.25%, Cofinimmo said. The Belgian assets acquired have an initial expected yield of 6.3% and are leased for 27 years to the Medibelge Group.

With the Medimur deal, Cofinimmo also gains a foothold in the French market, where it says it plans to set up a management and development structure and apply for the status of Société d’Investissement Immobilier Cotée (SIIC), France’s REIT regime. As a prelude to that, Cofinimmo said it would seek a listing on Euronext Paris during the course of 2008.

Separately, Cofinimmo said it is proposing a dividend of EUR 7.75 per share on 2007 earnings, a 4.7% rise on the previous year. Brussels-based Cofinimmo said it expected its net current result per ordinary share, excluding the impact of the accounting rule IAS 39, to be around EUR 8 for 2008. Its net current result for 2007, non-cash impact of IAS 39 excluded, amounts to EUR 9.11 per ordinary share, exceeding its own forecast of EUR 9 and 8.5% higher than in 2006. The net current result including the IAS 39 impact stood at EUR 8.2 per ordinary share, down 5.6% on 2006.

As of December 31, 2007, the total estimated investment value of Cofinimmo’s consolidated property portfolio amounted to EUR 2.9 bn. Its portfolio comprised of total rental area of 1,394,400 m² above ground. The vast majority, or 77%, of the assets consist of offices while nursing homes represent 8.1% and Pubstone, its pub assets,14.9% of the portfolio. With the latest acquisitions in France and Belgium, clinics and nursing homes now represent 15.3% of its total portfolio.

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2)

New Star UK fund sells London office for EUR 170m
Date published: 19 February 2008

UK asset manager New Star has sold the office property at 60 Gracechurch Street in the City of London for £127.5 mln (EUR 170 mln), reflecting an initial yield of about 5.5%. The fund manager declined to name the buyer but said it received a number of offers for the 11,150 m² office property. UK private equity group Evans Randall is rumoured to be the buyer of the property which houses the UK headquarters of German bank Commerzbank.

New Star said that the deal reflected 'good value for the City office market' and is 'a promising sign that liquidity and transaction levels have picked up in the UK commercial property market'. The asset manager bought the building in November 2006 for £146 mln.

The sale follows a strategic review of the New Star UK Property Unit Trust and a decision to reduce single asset exposure in the portfolio. The company said that part of the proceeds from the sale - the fund's largest holding - will be invested in listed property shares to take advantage of the significant discounts they trade at. As a result of the sale, the fund's liquidity position has risen to in excess of 25% of the fund's total assets under management - one of the highest liquidity positions in the industry.

'The sale of 60 Gracechurch Street in the City of London is a positive sign that liquidity and transaction levels have improved in 2008. To have achieved good value and to have received a high level of interest from active buyers is an encouraging sign for the UK commercial property market', said Roger Dossett, chief executive, property fund management.

New Star was founded in June 2000 by John Duffield, who previously established Jupiter Asset Management. New Star has 39 UK retail funds and employs more than 400 people in London, Dublin, Bermuda, Madrid, Zurich, Milan and Hong Kong. At end-2007, the group had £23.1 bn of assets under management.

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3)

Apollo RE acquires Legnano property
Date published: 20 February 2008

Apollo Real Estate has acquired a four-hectare industrial complex, formerly operated by manufacturer Pensotti, in the northern Italian city of Legnano from a Italian private investor. The US investor is teaming up with the Italian Palladium Group in a 80/20 joint venture to redevelop the site north of Milan into 300 residential units. The investment volume will come to EUR 100 mln, including about EUR 80 mln of development costs. Italian bank Intesa San Paolo is financing the deal.

Apollo RE plans to redevelop the area over the next five to six years, with construction due to start by the end of 2008. Apollo RE is targeting families and young couples in Milan who are eager to move to an affordable neighbourhood. The apartments, distributed across six buildings, are expected to be sold at about EUR 3,000 per m².

This is Apollo RE's second acquisition in Italy after the purchase in 2004 of the Ericsson headquarters in Rome. It is also the company's first venture with Palladium, a Milan-based property developer and the manager of the project.

Andrea Orlandi, director at Apollo Real Estate, said the US investor is already looking for more residential projects to carry out with Palladium in the north of the country. Orlandi added that the American company is focusing on residential property in the north of the country and on retail in the south. 'We are on the verge of buying two shopping centre developments in southern Italy', he said. He added that the company has already signed a preliminary agreement for the properties, and would not disclose other details on the transactions.

Apollo RE intends to strengthen its presence in the Italian property market where the effect of the credit squeeze appears to be less significant than in other European markets. Orlandi said this was mainly due to the restrained economic growth in Italy in recent years. 'Residential values in Italy haven't increased as much as they did in other countries, which means that the correction is now felt less significantly.'

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4)

Befimmo disposes of semi-industrial portfolio
Date published: 21 February 2008

Belgian real estate company Befimmo has agreed to sell its non-strategic portfolio of semi-industrial assets to American firm AIG Global Real Estate Investment and London-based property investor Rockspring for EUR 72 mln. The seven-building portfolio comprises 45,000 m² of semi-industrial space and 15,000 m² of office space in Zaventem, Belgium.

The transaction reduces the company's weighting of properties in the Brussels suburbs and marks its exit from the semi-industrial segment. Befimmo said in a statement that the deal was in line with its strategy to concentrate solely on investment in city-centre office buildings.

Once the transaction is completed by July, Befimmo's portfolio will consist of 814,000 m² of offices properties, valued at EUR 1.75 bn.
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5)

White Rock fund buys Dutch portfolio
Date published: 21 February 2008

White Rock Investments III, a White Estate Investments fund, has acquired the Penta portfolio in the Netherlands from British fund Cambridge Place Investments for EUR 68 mln.

The portfolio consists of a retail and office complex in Rotterdam; an office building in Capelle aan den IJssel leased to KPN; and a 11,000 m² office complex in the centre of Utrecht that is let to the municipality and the government's building agency. The assets provide a total leasable area of 32,000 m².

Jones Lang LaSalle advised Cambridge Place, while Savills acted for White Estate Investments.

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