Redefine International has also announced that it has agreed revised arrangements with Aviva Commercial Finance Limited with respect to the company's UK shopping centre portfolio. The transaction will substantially reduce its see through loan-to-value ratio, from around 64% to around 57% and see it acquire the 307 763 sq ft two-storey Weston Favell Shopping Centre in Northampton, England.
The transaction is subject to certain conditions, including JSE listing requirements. Once complete, it will result in a restructuring of the Aviva debt secured against Grand Arcade Shopping Centre in Wigan and West Orchards Shopping Centre in Coventry.
Michael Watters, CEO of the Redefine International Group, says, "This transaction not only produces a significant reduction in the group's leverage ratio but is expected to be earnings accretive from day one. The shopping centre is dominant in its local area and will benefit from our long term focus on delivering income through focussed asset management activity."
Weston Favell is an enclosed shopping centre situated on the edge of Northampton, anchored by one of the largest Tesco Extra supermarkets in the UK at 156,987sq ft, with a 14.3 years unexpired lease term. The centre has 56 retail units and seven kiosks let to a variety of national and local retailers.
"The centre, which produces a net rental income of £6.4 million a year, was acquired on a net initial yield, after acquisition costs, of 7.2%. The key investment attractions include the centre's dominance in the wider catchment, the lack of supermarket competition in the north east of Northampton and the strength of the Tesco covenant which accounts for 53% of the net passing rent," concludes Watters.
