Liberty scoops £27m on sale of Great Portland

Posted On Friday, 15 October 2004 02:00 Published by eProp Commercial Property News
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Experts say move frees cash for core business.

Colin YoungUK-based property giant Liberty International, which has a substantial South African shareholding, said yesterday it had agreed to sell its 25,5% interest in London Stock Exchange-listed Great Portland Estates at 297,5p a share for a total consideration of £123,4m.

The move was welcomed by analysts as it frees up Liberty International to invest in its property redevelopment programme.

The aggregate proceeds of £149,3m, which includes the return of capital from Great Portland Estates earlier this year, exceeded the original cost of the stake by £29m, of which £27m would be reflected as an exceptional profit in Liberty Internatonal's income statement.

"The disposal continues Liberty International's record of engaging in property-related investment activities alongside the group's core direct property business, which is predominantly focused on retail property, particularly prime regional shopping centres," the company said.

The shareholding was sold to Real Estate Funds, controlled by investment bank Morgan Stanley.

Andisa Securities property analyst Len van Niekerk said yesterday that it was a good decision , as he had been expecting Liberty International to sell its interest in Great Portland Estates.

There was initially speculation that the predominantly retail-property-focused Liberty International would make a takeover bid for Great Portland Estates, but this did not make sense because the two companies' property portfolios were so different, said van Niekerk.

He said the sale was a "trading opportunity".

Van Niekerk also said that Great Portland Estates owned "quite a bit" in the way of office properties that were lower quality than Liberty International's property portfolio.

Colin Young, fund manager of Old Mutual's South African-listed property funds, said Liberty International's move was positive .

"They've realised their profits and can plough the money back into direct property development which will yield some return," said Young.

Liberty International CEO  David Fischel said there was "little strategic value" to Liberty International keeping the interest in Great Portland Estates because it was predominantly an office portfolio. It also only made up 2,5% of Liberty International's total assets.

Liberty International is the thirdlargest UK property company, with property assets of £5,2bn.

In June this year the US subsidiary of Liberty International sold a prime San Francisco commercial property at a 30% premium to its market value as at December 31 last year. Subsidiary Capital & Counties sold Ghirardelli Square, a waterfront shopping centre, for about 45m . It was valued at $34,5m last year.

Liberty International is busying itself with its huge development and redevelopment retail property programme.

The company has about £1,25bn committed to redevelopment and additions at its existing shopping centres and to new retail schemes.

Last modified on Tuesday, 13 May 2014 14:48

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