| Tue 15 Mar 2005, 13:41 | | Uk Shopping Centre Transaction |
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Liberty International Plc - Uk Shopping Centre Transaction
LIBERTY INTERNATIONAL PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: LBT
Issuer Code: LILII
15 March 2005
MAJOR UK REGIONAL SHOPPING CENTRE TRANSACTION WITH PRUDENTIAL
Attached is a joint press release issued today by Liberty International PLC,
Capital Shopping Centres PLC (a wholly owned subsidiary of Liberty
International), Prudential Assurance Company Limited (`Prudential`) and
Prudential Property Investment Managers Limited (`PruPIM`).
Susan Folger
Company Secretary
Liberty International PLC
020 7887 7000
JOINT PRESS RELEASE BY PRUDENTIAL ASSURANCE COMPANY LIMITED (`PRUDENTIAL`),
PRUDENTIAL PROPERTY INVESTMENT MANAGERS LIMITED (`PRUPIM`), LIBERTY
INTERNATIONAL PLC (`LIBERTY INTERNATIONAL`) AND CAPITAL SHOPPING CENTRES PLC
(`CSC`)
15 MARCH 2005
This statement may contain certain `forward-looking statements` with respect to
certain of Prudential and Liberty International`s plans and their current goals
and expectations relating to their future financial condition, performance,
results, strategy and objectives. Statements containing the words `believes`,
`intends`, `expects`, `plans`, `seeks` and `anticipates`, and words of similar
meaning, are forward-looking. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events and
circumstances which are beyond Prudential or Liberty International`s control
including among other things, UK domestic and global economic and business
conditions, market related risks such as fluctuations in interest rates and
exchange rates, and the performance of financial markets generally; the policies
and actions of regulatory authorities, the impact of competition, inflation, and
deflation; experience in particular with regard to mortality and morbidity
trends, lapse rates and policy renewal rates; the timing, impact and other
uncertainties of future acquisitions or combinations within relevant industries;
and the impact of changes in capital, solvency or accounting standards, and tax
and other legislation and regulations in the jurisdictions in which Prudential
or Liberty International and their affiliates operate. This may for example in
the case of Prudential result in changes to assumptions used for determining
results of operations or re-estimations of reserves for future policy benefits.
As a result, Prudential or Liberty International`s actual future financial
condition, performance and results may differ materially from the plans, goals,
and expectations set forth in Prudential or Liberty International`s forward-
looking statements. Prudential and Liberty International undertake no obligation
to update the forward-looking statements contained in this statement or any
other forward-looking statements they may make.
MAJOR UK REGIONAL SHOPPING CENTRE TRANSACTION INVOLVING PRUDENTIAL AND LIBERTY
INTERNATIONAL
Prudential and PruPIM, both wholly owned subsidiaries of Prudential plc, Liberty
International and CSC, a wholly owned subsidiary of Liberty International, have
concluded a transaction, the principal provisions of which are as follows:
The Liberty International group has acquired or agreed to acquire from
Prudential its entire unitholding in Jersey unit trusts owning 50 per cent of
the Prudential group`s overall interests in
The Mall at Cribbs Causeway, Bristol and associated properties
the Manchester Arndale Shopping Centre and associated properties
for an aggregate consideration of GBP653 million based on market values as at 31
December 2004.
Liberty International will settle the consideration from its existing cash
balances and committed bank facilities. Completion in the case of Manchester
Arndale is expected shortly once final landlord approval is confirmed.
Under the terms of the transaction, PruPIM is to continue as asset manager for
these properties on behalf of the joint owners, as well as for the completion of
the GBP150 million Manchester Arndale extension which is currently underway and
due to open in phases between October 2005 and the end of 2006. The
consideration takes into account Prudential incurring the costs of completion of
the Northern Extension.
Furthermore, Prudential and CSC will seek to develop future areas of co-
operation, including accessing, where appropriate, the potential advantage from
their combined scale in such areas as commercialisation and procurement; and by
jointly investigating, where appropriate, future shopping centre investment,
development and management opportunities.
David Fischel, Chief Executive of Liberty International, commented:
`We are pleased to have entered into this transaction with Prudential and PruPIM
which enables them to meet their objective of achieving greater diversification
in their real estate holdings while also meeting Liberty International`s
strategic objective of investing in prime UK regional shopping centres and
increasing the scale and geographic spread of our activities. We look forward
to attractive returns from these significant interests in The Mall at Cribbs
Causeway and Manchester Arndale, which are acknowledged as highly successful UK
regional centres, enabling us to extend our long track record of profitable
expansion. We also look forward to considerable mutual benefits from a close
working relationship in the regional shopping centre industry between Liberty
International, CSC, Prudential and PruPIM.`
Martin Moore, Managing Director of PruPIM, commented:
`We are delighted to have achieved our objective of introducing another partner
into these two major shopping centre interests and look forward to working with
Liberty International and CSC whose long term investment approach and management
expertise make them an ideal joint owner of these prime regional shopping centre
interests. Between CSC and Prudential we have a substantial level of ownership
and presence in the UK`s top 25 shopping centres.`
Additional details concerning the transaction are attached to this press
release.
Enquiries:
Liberty International PLC:
David Fischel Chief Executive +44 (0)20 7960 1207
John Abel Director, +44 (0)20 7887 7057
Managing Director of
Capital Shopping Centres PLC
Public relations (Liberty International):
UK: Michael Sandler,
GCG Hudson Sandler +44 (0)20 7796 4133
SA: Matthew Gregorowski,
College Hill Associates +44 (0)20 7457 2020
Nicholas Williams,
College Hill Associates +27 (0)11 447 3030
Prudential
Martin Moore Managing Director 020 7548 6571
Chris Taylor Director: Portfolio Management 020 7548 6911
Public relations (Prudential):
Jane Batten PR and Communications Manager 020 7548 6632
ADDITIONAL DETAILS OF THE TRANSACTION
THE MALL AT CRIBBS CAUSEWAY, BRISTOL is the only out of town regional shopping
centre in the South West region. Seventy per cent of the visitors are in the
ABC1 profile with a high average spend. The overall retail offer at Cribbs
Causeway extends to some 1.5 million sq ft of high quality retail as the Mall
itself is combined with complementary open A1 retail warehousing, food
superstores, leisure park and restaurants. The destination is supported by
10,000 free car parking spaces.
Retail Area: 750,000 sq ft/69,678 sq m
Number of 135
Shops:
Key Anchor John Lewis, Marks and Spencer, Next, Boots,
Stores: BHS, WHSmith and H&M
Footfall 13,195,000 per annum
Statistics:
Website: www.mallcribbs.com
MANCHESTER ARNDALE SHOPPING CENTRE. The completion of the northern extension to
Manchester Arndale will create the largest in-town shopping centre in the UK.
The investment of over GBP150 million in the Northern Extension is creating an
additional 85 new shops and restaurants to include Next, Waterstones and Virgin
Megastore. Floorspace will increase by 550,000 sq ft to 1,400,000 sq ft in
total.
The new malls will connect with the newly refurbished and revitalised Halle
Square, creating a natural twin-level pedestrian circuit round the whole centre.
The range of units available will offer modern flexible retail space, with scope
for large stores and opportunities for smaller retailers alike.
Retail Area: 850,000 sq ft/78,967 sq m
A further 550,000 sq ft/51,096 sq m under
construction
Number of shops: 130, with a further 85 under construction
Key Anchor stores: Boots, Next, BHS, Littlewoods, Top Shop,
WHSmith, Argos, Dixons and New Look
Footfall Statistics: 27,389,000 per annum
Website: www.manchesterarndale.com
TENURE
The Mall at Cribbs Causeway is held under a 500 year leasehold interest
providing around a 66 per cent share of the rents from the centre. Manchester
Arndale will on completion be held under a 200 year leasehold interest from
Manchester City Council expected to provide around 95 per cent of the rents from
the entire scheme following the completion of the Northern Extension.
ASSOCIATED PROPERTIES
Associated properties also now held or to be held jointly under the transaction
include
in Bristol, the Retail Park at Cribbs Causeway, a 212,000 sq. ft. Retail Park
with ten units let to tenants such as Argos, Currys and JJB Sports. The Retail
Park has over 700 free car parking spaces and benefits from an open A1 planning
consent. The Retail Park is a freehold interest and was developed in two phases
by Prudential in the mid to late 1980s,
and
in Manchester, a 90 per cent leasehold interest in the 200,000 sq.ft. retail
component of New Cathedral Street , a recently developed mixed use property in
an open street format situated close to Manchester Arndale. New Cathedral
Street is anchored by Harvey Nichols (who hold a ground lease) and eight other
shops and stores including Zara, Heals, Austin Reed, Hobbs, Ted Baker and Reiss.
VALUATION YIELDS AND PASSING RENTS
The nominal equivalent yields used for the transaction based on the market
values at 31 December 2004 were 5.5 per cent in the case of The Mall at Cribbs
Causeway and a range from 5.6 per cent to 5.75 per cent in the case of
Manchester Arndale. Net income passing rents at 31 December 2004 attributable
to the joint ownership interests amounted to GBP24.5 million in the case of The
Mall at Cribbs Causeway and associated properties and GBP23.3 million in the
case of Manchester Arndale and associated properties, save that, in the case of
Manchester Arndale, the Jersey unit trust has been guaranteed a minimum yield of
5 per cent until the Northern Extension is income producing following completion
when the estimated net income passing rents are anticipated to exceed the
guaranteed minimum.
PRUDENTIAL
Prudential Property Investment Managers Ltd (`PruPIM`) is a part of M&G, the
investment arm of Prudential plc in the UK. As such, it is responsible for
investing in and managing property investment portfolios on behalf of
Prudential. It has GBP14.8 billion of funds under management and is one of the
largest property investment managers in the UK.
PruPIM manages a UK retail portfolio comprising in excess of GBP3 billion of
shopping centres, almost GBP2 billion of high street retail outlets and more
than GBP1 billion of retail warehousing. This comprehensive exposure gives the
company an unrivalled insight into retail markets.
LIBERTY INTERNATIONAL is the UK`s third largest listed property company and a
constituent of the FTSE-100 index with a market capitalisation around GBP3.1
billion.
CAPITAL SHOPPING CENTRES PLC (`CSC`), a wholly owned subsidiary of Liberty
International, is the leading property company in the UK specialising in the
ownership, management and development of regional shopping centres. In addition
to the assets acquired under this transaction, CSC owns three of the UK`s major
out-of-town regional shopping centres; Lakeside, Thurrock; MetroCentre,
Gateshead; and Braehead, Renfrew, Glasgow; together with six major in-town
regional centres in Newcastle, Nottingham, Watford, Bromley, Uxbridge and Stoke-
on-Trent; and is engaged on a substantial development programme involving both
new city centre schemes in Norwich, Cardiff and Oxford, and extensions and
improvements to existing shopping centres.
Including the transaction referred to in this announcement, the Liberty
International group`s regional shopping centre interests now exceed GBP5 billion
by market value.
In addition to CSC, Liberty International owns Capital & Counties, a property
company with some GBP1 billion of retail and commercial properties in the UK and
USA. The group`s USA assets are predominantly in California, where some $500
million is invested in regional shopping centres and other retail properties.
NATIONAL TOP 25 SHOPPING CENTRES RANKED BY OVERALL ATTRACTIVENESS
2004 Scheme Location Gross Area Interest held
Rank (Sq.Ft) by Prudential
and/or CSC
1 Bluewater Dartford - 1,610,000 Prudential
Greenhithe (35%)
2 MetroCentre* Gateshead 1,598,000 CSC (90%)
3 Meadowhall Sheffield 1,453,000 -
4 Lakeside Shopping Grays - Thurrock 1,377,000 CSC (100%)
Centre
5 The Trafford Centre Manchester - 1,400,000 -
Trafford
6 Merry Hill Centre Brierley Hill 1,500,000 -
7 The Centre: MK Milton Keynes 1,300,000 Prudential
(36%)
8 Eldon Square Shopping Newcastle-upon- 961,000 CSC (45%)
Centre Tyne
9 Whitgift Centre Croydon 1,236,000 -
10 Festival Place Basingstoke 850,000 -
11 Brent Cross Shopping London - Hendon 855,000 -
Centre
12 The Harlequin Watford 721,000 CSC (93%)
13 The Mall at Cribbs Bristol - Cribbs 725,000 Prudential/CSC
Causeway Causeway (66%)
14 Bullring Birmingham 1,200,000 -
15 The Telford Shopping Telford 1,000,000 -
Centre
16 The Victoria Centre Nottingham 807,000 CSC (100%)
17 The Arndale Shopping Luton 850,000 Prudential
Centre (90%)
18 Braehead Shopping and Glasgow - 800,000 CSC (100%)
Leisure Centre Braehead
19 Kingfisher Shopping Redditch 1,000,000 -
Centre
20 Queensgate Shopping Peterborough 807,000 -
Centre
21 Arndale Centre** Manchester 850,000 Prudential/CSC
(95%)
22 WestQuay Southampton 818,084 -
23 Almondvale Shopping Livingston 550,000 -
Centre
24 The Glades Bromley 421,000 CSC (63%)
25 White Rose Shopping Leeds 650,000 -
Centre
* Survey conducted prior to Red Mall extension
completed in Autumn 2004 increasing the size of
MetroCentre to 1.8 million sq.ft.
** The rank of Manchester Arndale is expected to rise
substantially in 2007 on completion of the Northern
Extension increasing the size to 1.4m sq.ft.
Source: Churston Heard and TW Research Associates 2004
--- Ends ---
Sponsor
Merrill Lynch
