Invista Real Estate Investment Management has bought the remaining 50% interest in Invista Castle from joint venture partner Bank of America.
The £26m deal, funded from Invista’s existing cash resources, means Invista now owns 100% of the equity of Castle.
Castle’s portfolio comprises 317 freehold houses in five separate locations in the southwest of England, built under a private finance initiative project with the Ministry of Defence (MoD) to provide housing for its senior personnel. The portfolio has a long-term lease with the MoD and a gross yield of 6.7%, based on Castle’s assets under management of £127.5m as at 31 December 2007.
Invista said that going forward it plans to fully consolidate Castle, including Castle’s assets under management and its existing £73m of senior debt which is due 2028 together with a new three-year acquisition loan facility of £15m, on Invista’s group balance sheet.
It said doth these debt facilities are secured on the underlying assets of Castle and are nonrecourse to Invista.
Duncan Owen, chief executive officer at Invista, said: ‘We are delighted to have secured 100% of Castle on these terms. The deal represents an important transaction for Invista, with residential being a key growth area for our business. With longer term financing in place supporting the assets,
'Invista can now concentrate on the strategy surrounding recycling its investment in Castle for the benefit of Invista shareholders.’