LEI: 213800BMY95CP6CYXK69
8 March 2024
ALPHA REAL TRUST LIMITED ("ALPHA REAL TRUST" OR THE "COMPANY")
SALE OF H2O SHOPPING CENTRE INVESTMENT, MADRID
Alpha Real Trust Limited announces the sale of the H2O shopping centre ("H2O") in Madrid. ART has a 30% stake in a joint venture with CBRE Investment Management that owns the shopping centre.
The sale price for H2O of ?111m represents an annualised net initial yield of 7.5% based on the forecast 2024 net operating income and capital expenditure budgeted by the purchaser. The transaction is subject to a limited number of conditions which are required to be satisfied for closing. Closing is anticipated to occur during the second quarter of 2024, but no later than 31 July 2024, following fulfilment of the conditions precedent.
Under Alpha Real Trust's ownership the shopping centre has benefited from a near 50% increase in annual visitor numbers. Alpha Real Capital, the Company's Investment Manager has actively managed the asset and through the addition of top tier brands and targeted capital expenditure has successfully repositioned the centre. The shopping centre's leasable area has been extended, partly enabled by the transfer of building rights from a nearby separate vacant site, strategically acquired for that purpose. This has permitted a new retail box and two drive thru restaurant units to be created on the shopping centre's surface car park. More recently it has facilitated a major reconfiguration and upgrade of a mall area to create a new 3,000m2 anchor tenant unit pre-leased to Primark. Further anchor tenants, including a number of Inditex group's brands, have recently extended and upgraded their stores.
Upgrades to the property have resulted in a BREEAM certification being awarded and the centre receiving a two notch uplift in its energy rating, resulting in a Green Loan certificate being granted from the lending bank.
The sale would result in a receipt of ?14.5m in net proceeds to ART and would reduce net asset value by approximately 4p per share.
Gordon Smith Joint Fund Manager ART commented: "Since its acquisition by the Company, H2O has undergone a significant operational and commercial enhancement. The Company's targeted capital expenditure has focussed on projects capable of delivering an identifiable return on investment, delivering an enlarged leasable area and upgraded tenant mix. The sale of H2O represents an opportunity for the Company to recycle capital into its broader investment strategy. ART currently focuses on selectively increasing its loan portfolio and opportunistically extending its wider investment strategy to target high return property investments offering inflation protection via index linked income adjustments and investments that have potential for capital gains."
For further information please contact:
Alpha Real Trust Limited
William Simpson, Chairman, Alpha Real Trust +44 (0) 1481 742 742
Brad Bauman, Joint Fund Manager, Alpha Real Trust +44 (0) 20 7391 4700
Panmure Gordon, Broker to the Company
Atholl Tweedie +44 (0) 20 7886 2500
Further information on the Company can be found on the Company's website: www.alpharealtrustlimited.com.
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