# intu properties plc  and Cale Street 50/50 joint venture for the intu Derby

- Link: https://www.directorstalkinterviews.com/intu-properties-plc-and-cale-street-50-50-joint-venture-for-the-intu-derby/412772562
- Published: 2019-04-18T08:11:55+01:00
- Author: Charlotte Edwards

**intu properties plc** (LON:INTU) and Cale Street Investments LP, an investment
firm backed by the Kuwait Investment Office, London, are pleased to announce the
establishment of a 50/50 joint venture for the intu Derby shopping centre.

Cale Street will acquire for cash the 50 per cent 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. This structured equity transaction
includes a prioritisation waterfall for distributions to the joint venture partners.

The consideration for the 50 per cent interest is in line with the valuation at 
31 December 2018 of £372.5 million (100 per cent), which represents a net initial
yield of 6.6 per cent. The net rental income of the property was £25.2 million for
the year ended 31 December 2018.

intu Derby is located in the centre of Derby and is a key retail and leisure destination
in the East Midlands, with an annual footfall of 22 million. The 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 will continue to manage the centre on behalf of the joint venture. The closing
of the transaction will be subject to completing senior debt finance, the discussions
for which are well advanced, and certain other completion conditions.

The transaction further advances intu’s stated strategy of reducing its debt to 
assets ratio through disposals, part-disposals and introducing partners to assets.
Following the joint venture financing process, intu will use the net proceeds of
the transaction to repay debt.

> **Matthew Roberts, Chief Executive Designate, commented:**
> “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.”

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