Realty to buy Ediston Property portfolio for £197m

US investor Realty Income has agreed to acquire Ediston Property Investment Company’s retail park portfolio for £196.8m after deductions. R1 UK 1, a subsidiary of Realty, will buy the portfolio for a cash consideration of £200.8m, prior to agreed deductions of around £4m. The portfolio’s book value stood at nearly £207.3m in August. In the six months ending 31 March, the portfolio incurred losses of £25m and generated £7.6m of revenue from rental income. EPRA NAV per share was 80.4p for the period. The portfolio comprises 11 retail park properties across the UK, totalling nearly 1.2m sq ft. There are 64 tenants across 108 units, with an aggregate contracted market rent of circa £16.4m per annum, producing an average rent of £13.97 per sq ft. Its weighted average unexpired lease term was 5.3 years during the period from 30 September 2022 to 6 September this year, up from 4.5 years at its last financial year-end. Realty Income will take over management for all of the properties in the portfolio. After deal completion and adjustment for estimated transaction costs, Ediston expects to have net assets worth around £152.2m, equivalent to 72p per ordinary share. If the disposal becomes unconditional, the board will seek shareholder approval for the voluntary liquidation of the company with a view to distributing all of the company’s net assets in cash to shareholders by the end of the year, unless another corporate opportunity is identified. Shareholders will vote on the deal at a general meeting on 26 September. William Hill, chairman of Ediston Property, said: “The board was very pleased with the interest shown in the company, with proposals being received from a number of potential counterparties. “Having considered multiple options, and after detailed analysis, the board determined a sale of the property portfolio to Realty Income was the best means of maximising shareholder value. The board unanimously considers the disposal to be in the best interests of the company and its shareholders as a whole and recommends that shareholders vote in favour of the resolution at the general meeting.” To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews