London-based Chester Properties is thought to be under offer to buy Aviva Investors’ Project Ed portfolio.
Property Week has learnt that Chester went under offer last night to buy the portfolio for around £800m. The portfolio includes 47 properties across the UK from a range of sectors. There are 250 different tenancies and an average unexpired nine-year lease term.
If the deal completes it will be one of the biggest property transactions in the UK since the onset of the credit crunch.
Chester was been selected from a shortlist that included CIT with backing from Saudi Arabia’s Jadwa Investment; Robert Whitton and Darren Burney’s ROM Capital; Boultbee; Topland; entrepreneur Brett Palos with Matterhorn Capital’s Anthony Lyons and Simon Conway; and Chester Properties.
The sale of the Project Ed portfolio is being closely watched by the market and there was a large amount of investor interest in the portfolio particularly as Aviva Investors is providing debt on the portfolio through Aviva Commercial Finance.
It offered bidders a loan on a 75% loan-to-value basis for seven years at 275 basis points above LIBOR (London interbank offered rate) – a loan that could be up to £600m if the portfolio price reaches £800m.
While the debt package has eased the marketing process, any purchaser will still be required to write an equity cheque of up to £200m.
The last big transaction of this nature was the £600m sale of the Dawnay Day portfolio to F&C REIT Asset Management and Area Property Partners late last year.
DTZ advised Aviva.