Capital & Regional has sold an 80% stake in its £180m Fix trade park portfolio to reduce its level of debt.
The listed co-investing fund manager said that Paradigm and Bank of Scotland Corporate had paid £35m for the 80% stake. It said the sale removed £120m of debt from its balance sheet, although it maintained a 20% exposure to this as a co-investor.
Cap & Reg said cash from the sale would be used to pay down £35m of its core debt facility.
The FIX portfolio is made up of 51 trade parks comprising 276 units over 1.7m sq ft.
Xavier Pullen, deputy chief executive of Capital & Regional said: 'This new fund offers the potential for greater scale and presence in the market. We look forward to working with Paradigm and the new investors to create a significant business.’
In a note on the company this morning, JP Morgan property analyst Harm Meijer said the biggest danger facing Cap & Reg was high loan-to-value ratios, especially on property held outside its three main Mall, Junction and X-Leisure funds. He said the company’s overall loan-to-value ration was likely to rise from 63% to 67% in 2008, based on the assumption that the company would make £375m of disposals in 2008.
In February Property Week revealed that Capital & Reg was hoping to raise up to £450m through the sale of the Fix portfolio and several centres from its £3bn Mall fund.