Kuwait-backed Firm Buys 50% Stake In UK Shopping Mall

UK-based Intu Properties and Cale Street Investments, an investment firm backed by the Kuwait Investment Office, have announced a 50/50 joint venture for the Intu Derby shopping centre.

Cale Street Investments plans to buy half the interest in the Derby shopping centre, which is visited by 22 million shoppers each year, Intu said in a statement on Thursday.

Cale Street will acquire for cash the 50 percent interest for consideration which values their share of the property at £186.3 million, before taking account of senior debt finance and customary working capital adjustments.

The net rental income of the property was £25.2 million for the year ended December 31, 2018.

Intu Derby, a 1.3 million sq ft centre, was extended and redeveloped in 2007 and provides over 200 units and includes key retailers such as M&S, Debenhams, Next, H&M, Sainsbury’s, Zara, Hollywood Bowl and Showcase Cinema de Lux.

Intu said it will continue to manage the centre on behalf of the joint venture, adding that following the joint venture financing process, it will use the net proceeds of the transaction to repay debt.

Matthew Roberts, chief executive designate, said: “We are pleased to announce our new partnership with Cale Street and look forward to working with them at intu Derby.

"In what is a challenging investment market, this innovative transaction, which is in line with the December 2018 valuation, shows Intu is delivering on its strategy of reducing loan to value through disposals and part-disposals. On a pro-forma basis, we expect the impact of this transaction to reduce our loan to value by around one per cent.”  

Intu, which has a market valuation of £1.33 billion and net external debt of £4.87 billion, had in February said it would hold off on British disposals as investors weighed the outcome of Brexit.