Palmer Capital Partners - Industrial Sale - £70 Million Portfolio
Date: 05 May 2005
Palmer Capital Partners ("PCP") and Deutsche Property Asset Management Limited ("DePAM"), the UK team of DB Real Estate, announce this week that they have completed an agreement with Somerfield plc to acquire 118 petrol filling station sites from Texaco. PCP and Deutsche UK Property Ventures Fund No.2 ("DUKPVFNo2") will acquire 105 sites, of which 101 are freehold, for a consideration of circa £70 million. Somerfield will acquire another 13 forecourts, of which nine are freehold, for a consideration of circa £7.3 million.
The joint venture between PCP and DUKPVFNo2 made the acquisition in competition with a Tchenguiz led consortium, London and Regional and Topland, all of whom are believed to have bid for the portfolio originally and are potential bidders for Somerfield plc. Ray Palmer commented, "To have achieved this acquisition in the midst of the storm surrounding Somerfield plc is a remarkable achievement."
PCP will be responsible for redeveloping the sites into Somerfield convenience stores, using the seven regional companies in which it holds an interest, and lease them back to Somerfield plc on 20 year leases with fixed annual uplifts. The project has a completed development value of circa £200 million.
Once developed, the sites will be rebranded under the 'Somerfield Essentials' format and Somerfield will be responsible for running the whole forecourt, including petrol pumps and car wash. Texaco will continue to supply the fuel to the forecourts, which will retain the Texaco brand.
Ray Palmer, Chairman of Palmer Capital Partners, commented: "This deal is a strong endorsement of our ability to both finance and carry out the development of this type of project. It is one of the largest sale and leaseback development deals in the UK in recent years and as such was very competitive. We believe that our ability to field a team of seven in-house development companies was a key factor in our success and we look forward to working with Somerfield as it expands its Somerfield Essentials stores across the UK."
James Petit, Director of Deutsche Property Asset Management Limited, said: "The Fund is delighted to be involved in this project which has real upside to go for. It has been a challenge to pull together in such a short timescale, but that is one of our strengths."
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