Arlington Business Parks Partnerships fund is to reduce its outstanding debt from £400m to £270m through the sale of a £140m headquarters building in Reading, Berkshire.
The fund, managed by Goodman and operated by Legal & General Property, was last month given a deadline of January next year to reduce its debt to £300m.
But the sale of the 392,000 sq ft HQ at Reading International business park to an overseas client of RREEF has enabled the fund to pay down a larger chunk of debt ahead of schedule.
The asset is let to global communications group Verizon.
The group entered into a £800m CMBS in 2007 and last month agreed a revised repayment of the loan with servicer Eurohypo in exchange for an extension of a key covenant waiver.
James Cornell, chief financial officer for Goodman UK, said: “The proceeds of the sale reduce leverage and provide certainty that the remaining CMBS debt can be extended, if required, to July 2014. Utilising these sales proceeds, ABPP will have repaid circa £530m of the £800m CMBS issued in August 2007. The resulting financial flexibility places ABPP in a strong position to deliver enhanced risk-adjusted returns.”
He added that the group hoped to reduce the debt to £200m during 2013.
Goodman said that the sale would take the fund’s gearing down to within its target of 40-50%.
Strutt & Parker advised ABPP; DTZ acted for the buyer.
samantha.mcclary@estatesgazette.com
