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Liberty International in 275m pound venture

Posted On Wednesday, 15 May 2002 10:01 Published by
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LIBERTY International has acquired a 100% interest in Chapelfield, a planned retail development in Norwich in the UK

LIBERTY International, the London- based property group with a secondary listing on the JSE Securities Exchange SA, has acquired a 100% interest in Chapelfield, a £275m planned retail development in Norwich in the UK.

Steered by Donald Gordon, who became a financial services tycoon in SA in the 1980s and 1990s, Liberty International has become one of the largest listed commercial property investors in the UK.

The Chapelfield investment boosts Liberty's retail property assets to about £3,5bn and total assets to about £4,4bn.

A large part of this asset base was added recently when Liberty International went on an acquisition spree.

The acquisition trail saw the group enter the US retail market with a multimillion dollar portfolio held by subsidiary Capital Counties.

The buying spree followed a restructuring process which saw Gordon championing the unbundling of SA's Liberty Life stake in Liberty International and the disposal of noncore activities, particularly financial services.

Chapelfield will be held through another subsidiary, Capital Shopping Centres, which has a portfolio of 10 premier shopping centres adding up to about 7743000m², across the UK.

Liberty is walking into this investment with extra caution, and this is reflected in the sale agreement, which gives the company a right to back off if certain targets are not met.

Liberty will deliver £40m in cash at the start of construction in July, and the balance of the total £275m investment will come on completion in about three years' time, if the development is 70% let.

Liberty CE David Fischel said this sort of caution was normal in investments of this magnitude. The transaction would lapse if agreed targets were not met, he said.

Fischel said occupancy in the 47397m² mixed-use project was about 6% so far, and would be anchored by a major UK retailer called House of Fraser.

The plan includes 10 large stores and more than 80 shops, restaurants and cafes as well as 115 residential units.

Capital Shopping Centres MD John Abel said Chapelfield was one of the largest investments in Norwich to date.

'This is an excellent opportunity for Capital Shopping Centres to add to its current portfolio of prime retail centres in the UK,' said Abel.

Business Day

Publisher: Business Day
Source: Business Day
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