Wrap Text
Acquisition of Midsummer Place
INTU PROPERTIES PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: ITU
Press Release
INTU PROPERTIES PLC
27 FEBRUARY 2013
INTU PROPERTIES PLC ANNOUNCES ACQUISITION OF MIDSUMMER PLACE, MILTON KEYNES
Intu Properties plc ("Intu" or the "Company") today announces that it has agreed terms with Legal & General Property to acquire
Midsummer Place Shopping Centre, Milton Keynes (“Midsummer Place” or the “Centre”) for a total cash consideration of
£250.5m (the “Acquisition”) before expenses, representing a net initial yield of 5.1%, based on current net rents of £13.4m, and
a nominal equivalent yield of 5.5%.
Commenting on the Acquisition David Fischel, Intu’s Chief Executive, said:
"We are delighted to have agreed terms to acquire this prime asset which addresses a gap in our UK
regional coverage. As well as strong current operating metrics and good demographics, Midsummer
Place offers considerable scope for rental growth. The acquisition fits well with our strategy of focusing on
the best shopping centre destinations across the country."
Investment rationale
• The Acquisition provides the opportunity to acquire a 100% freehold interest in an established prime shopping centre with an
attractive mix of retailers, including Debenhams, H&M, Topshop, Hollister, GAP, Zara, Superdry and Apple.
• Midsummer Place has strong operating metrics with annual footfall in excess of 17 million and current vacancy of 3%.
• The Centre offers scope for rental growth by implementing identified asset management initiatives and leveraging Intu’s
extensive retailer relationships to drive a tenant mix strategy orientated towards young fashion and aspirational brands.
• Milton Keynes is a major city, in one of the UK’s more affluent regions, with a growing catchment population.
• The Acquisition is consistent with Intu’s strategy of owning and operating some of the very best shopping centres, in the
strongest locations right across the country.
• With 16.6 million sq ft of retail space, valued at £7.1 billion (before this Acquisition), Intu’s centres attract over 320 million
customer visits a year and two thirds of the UK population live within a 45 minute drive time of one of its centres. The
Acquisition addresses a regional gap in Intu’s UK coverage enabling it to strengthen its national offering to retailers.
Key facts on Midsummer Place
• Midsummer Place is located in Central Milton Keynes and was opened in 2000. It has more than 420,000 sq ft of space,
providing 50 retail units, on a single-level mall. The Centre has been built and finished to a high specification, creating large
retail units that meet with modern retailer requirements.
• Midsummer Place comprises Milton Keynes’ premier retail offer, with leading names such as Hollister, Superdry and Apple
orientating the tenant mix towards young trends, as well as fashion brands including Coast, Karen Millen and Hobbs. The
Centre has defined itself as the “fashion quarter” for Milton Keynes with the tenant mix highlighting its strength.
• The Centre is anchored by Debenhams (135,500 sq ft, store modernisation carried out in 2010) and H&M (25,000 sq ft). At
the other end of the mall the Centre benefits from the linkage with the centre:mk, the city’s other major shopping centre.
Other major space users at Midsummer Place include Top Shop, New Look, GAP and Zara.
• Approximately 91% of the income from the Centre is secured against national and international retailers. The weighted
average unexpired lease term is in excess of six years.
• Midsummer Place is easily accessible by car and benefits from an adjoining multi-storey car park with provision for 750 cars
which contributes to the 20,000 car parking spaces available overall in Central Milton Keynes.
Opportunity for rental growth
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• The Company believes that there is an opportunity to deliver rental growth over time, through the implementation of asset
management initiatives, as a result of certain factors:
o Current rental levels at the Centre are moderate when compared with prime shopping centres of a similar size,
particularly given the high footfall and quality of the catchment area
o Many stores in the Centre are understood to be strong performers in retailer portfolios
• Potential asset management initiatives include, but are not limited to:
o Delivering key retailer additions, including relocation of certain existing tenants, to fill gaps in current tenant mix and
build on the “fashion quarter” positioning of the Centre
o Improving the existing catering offer to increase dwell times
o “Right sizing” certain retailers’ shops to create flagship stores offering full product ranges
o Carrying out strategic lettings and renewals to deliver a reduction in rental tone differential between the East Walk
(currently lower) and West Walk
o Securing re-fits, unit enhancements and improved signage, where appropriate, as part of lease renewal negotiations
o Repositioning of the Boulevard, the area linking Midsummer Place to the centre:mk, to create more of a destination
and enclose an otherwise underutilised space
Completion of the Acquisition is expected to take place at the end of March 2013.
The Acquisition will be funded by an underwritten equity placing (the "Placing") which the Company announced this morning.
The asset is unencumbered and, pro forma for the Placing and Acquisition, the Company’s debt to assets ratio at 31 December
2012 is reduced from 49.5% to 47.5%.* The Acquisition is expected to be neutral to underlying earnings.
*Assumes a Placing of 9.9% of the Company's issued share capital at a Placing price of 342.9 pence per Ordinary Share
(equivalent to the Company's closing share price on 26 February 2013), and a cash consideration for the Acquisition of £250.5
million, net of expenses for the Placing and Acquisition
Enquiries:
Intu Properties plc
David Fischel Chief Executive +44 (0)20 7960 1207
Matthew Roberts Finance Director +44 (0)20 7960 1353
Kate Bowyer Head of Investor Relations +44 (0)20 7960 1250
Public relations
UK: Michael Sandler/Wendy Baker, Hudson Sandler +44 (0)20 7796 4133
SA: Nick Williams/Vanessa Hillary, College Hill +27 (0)11 447 3030
A copy of this announcement is available for download from our website www.intugroup.co.uk.
APPENDIX
Key facts on Milton Keynes
• Milton Keynes in Buckinghamshire is conveniently located between London, Birmingham, Oxford and Cambridge with
Central Milton Keynes established as a major regional shopping and leisure destination. Total footfall for Central Milton
Keynes is equivalent to other major regional city centre locations.
• The city is well connected, located two miles West of the M1 motorway, 54 miles North West of London and 72 miles South
East of Birmingham. Central Milton Keynes railway station, a short walk from the Centre, is on the West Coast mainline and
is served by train services to London with a fastest journey time of 35 minutes.
• Central Milton Keynes has a catchment population of 1.3 million living within a 45 minute drive time, with ‘Secure Families’
and ‘Wealthy Executives’ ACORN groups representing the largest number of households. The city has an affluent
catchment population indicated by the proportion of households owning two or more cars and percentage of owner-occupied
households higher than the national average.
• In terms of the local economy, Milton Keynes has been one of the UK’s strongest city economies in recent years, boasting a
high rate of business start ups, a large pool of highly skilled residents and innovative companies. The city also ranks in the
top 5 in terms of proportion of private sector employment and top 10 in terms of employment rate. Major employers in the
city include Santander, The Open University and ICT companies: EDS; Gentronics; and Unisys.
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• Milton Keynes has been the fastest growing UK city in terms of population, expanding by nearly 17% from 2001 to 2011. It
has also seen the highest housing supply growth of all UK cities over the same period. Milton Keynes’ population growth is
forecast to continue to outpace the national average and the city is set to rise up the ranks of UK cities by size. To meet this
expected increase in residents 28,000 new homes are planned by 2026.
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NOTES TO EDITORS
Intu Properties plc (formerly Capital Shopping Centres Group PLC) owns and operates some of the very best shopping centres, in
the strongest locations right across the country, including ten of the UK’s top 25. You can find every one of the UK’s top 20
retailers in our shopping centres, alongside some of the world’s most iconic global brands.
With 16.6 million sq ft of retail space, valued at £7 billion, our centres attract over 320 million customer visits a year and two thirds
of the UK population live within a 45 minute drive time of one of our centres.
At the forefront of UK shopping centre evolution since the 1970s our focus is on creating compelling destinations for consumers,
with added theatre.
On 15 January this year, we announced the creation of a nationwide consumer facing shopping centre brand - intu - and the
transformation of our digital proposition including a transactional website, to provide the UK’s leading shopping centre experience
on and off-line.
We have an investment plan of £1 billion over the next ten years on active management projects and major extensions of existing
assets involving most of our centres.
Over 80,000 people are employed at our centres across the UK and we are fully committed to supporting our local communities
and the wider environment through meaningful and hands-on initiatives.
We changed our name from Capital Shopping Centres Group PLC to Intu Properties plc on 18 February 2013.
This press release contains “forward-looking statements” regarding the belief or current expectations of Intu Properties plc, its Directors and
other members of its senior management about Intu Properties plc’s businesses, financial performance and results of operations. These
forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve
known and unknown risks, uncertainties and other factors, many of which are outside the control of Intu Properties plc and are difficult to predict,
that may cause actual results, performance or developments to differ materially from any future results, performance or developments expressed
or implied by the forward-looking statements. These forward-looking statements speak only as at the date of this press release. Except as
required by applicable law, Intu Properties plc makes no representation or warranty in relation to them and expressly disclaims any obligation to
update or revise any forward-looking statements contained herein to reflect any change in Intu Properties plc’s expectations with regard thereto
or any change in events, conditions or circumstances on which any such statement is based.
Any information contained in this press release on the price at which shares or other securities in Intu Properties plc have been bought or sold in
the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance.
Sponsor
Merrill Lynch South Africa (Pty) Ltd
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