German fund CGI has pulled off the acquisition of Chelsfield’s White City shopping centre development (pictured) for £1.4bn, a year after the company first launched a bid for the scheme.
The deal was finally signed after Chelsfield and CGI reached an agreement after protracted negotiations with Transport for London, which owns the freehold.
Made on behalf of CGI’s HausInvest Europa fund, it is the biggest-ever investment by a German open-ended fund.
CGI, advised by FPDSavills, has bought the entire site and will provide development funding until practical completion in October 2007, when Chelsfield has the right to buy back 50% of the scheme.
CGI then has a 6.5% priority yield, which means it is guaranteed that return on its investment once the scheme is completed. Any overage generated by the rents will be split 50:50 between CGI and Chelsfield.
About £200m of the £1.4bn investment will go on public transport. This will pay for infrastructure work including a new depot for the Central Line because the existing depot is in the way of the development.
There will also be a new tube station at the north-east corner of the scheme and a new railway station on the east side connecting White City with Clapham Junction.
As well as the long talks with TfL, the sale was delayed when Chelsfield was taken private by Elliott Bernerd and a coterie of his investors, including the Reuben brothers.
White City will comprise 1.4m sq ft of retail space and 4,500 parking spaces.
CGI managing director Arnold de Haan said: “I’m a great believer in the scheme and there’s a huge amount of interest from all kinds of retailers. We are convinced that when it’s completed it will be 100% let.”
Marks & Spencer has already signed a lease for a 150,000 sq ft store and Debenhams plans to take space. De Haan said a planning application had also been made to extend the M&S store by 50,000 sq ft.
The Aspinalls casino group is to anchor the 300,000 sq ft of leisure.
References: EGi News 20/08/04
