Moor Park Capital Partners, the corporate finance-led real estate transactions specialist, has had a busy start to the year.
In January the firm led and advised a consortium in a £700m (€826.8m) sale-and-leaseback of 12 Spire Healthcare UK hospitals. The buyers included a small group of large institutional investors, based in Malaysia and the US.
Jagdeep Kapoor, partner at Moor Park Capital, says: “This was a complex transaction that is typical of the type of bespoke investment that Moor Park Capital originates, structures and executes on a non-discretionary basis for its pool of investors. It was a long-term sale-and-leaseback transaction let to a single tenant with multiple assets that are mission-critical to their business.”
Service provider
The company was also named as the exclusive European service provider for American Realty Capital’s new publicly registered non-traded REIT, American Realty Capital Global Trust.
Moor Park thinks that, owing to a number of factors, the time is right to invest in Europe. These factors include the widening of yields between primary and secondary real estate without compromising on tenant credit quality; a significant spread between acquisition yields and cost of debt financing; a considerable reduction in the number of real estate investors active in the European market; and higher demand from companies seeking to raise capital through sale-leaseback transactions.
Up to 40% of the equity raised for the new REIT will be invested in Europe. One of its key investment objectives is to build a diversified portfolio of sale-and-leaseback transactions that are diversified in relation to the credit risk associated with any one tenant, industry or country.
Moor Park plans to acquire primarily single-tenant commercial properties with long-term (minimum 10 years), triple-net leases across a number of different property sectors and countries within Europe for the REIT.
Initially, the company will focus on the UK, Germany and France and deal sizes will range from £5m to £75m; the overall leverage of Global Trust will be no more than 45%.
The new REIT is not restricted to any asset types, although there is likely to be a strong concentration in retail, retail parks and retail warehouses as well as industrial and logistics properties.
To a lesser extent, Moor Park will look at other types of assets including leisure, offices, student accommodation and hotels that may fit the REIT’s investment guidelines.
The first Global Trust deal was the acquisition of a McDonald’s restaurant in Carlisle, UK.
The first American Realty Capital Global Trust, Global 1, will be 40% allocated to Europe, and 60% to the US property markets. The second REIT, Global 2, will be launched next year. According to Gary Wilder, partner and executive chairman: “We will probably invest between $300m and $400m in Europe this year and probably $500m in 2014. Global 2 will be almost totally allocated to Europe.”
Europe focus
Moor Park Capital was founded in 2006 as a UK limited liability partnership regulated by the Financial Services Authority. Headquartered in London, Moor Park is a private real estate firm focused on European commercial property investment, with some £2.7bn of real estate assets under management.
The company provides a range of services, including acquisition, development, asset, property and facility management, leasing services, corporate support services and financing services. Partners Gary Wilder, Shemeel Khan and Jagdeep Kapoor run the company. They have a combined 60 years’ experience and have structured and executed more than £20bn of real estate transactions collectively over their careers.
European examples include Moor Park Capital’s 2011 sale of a €55m portfolio of 48 assets occupied by Banco Sabadell to Inditex investment subsidiary Pontegadea.
“We don’t operate as a fund but rather deal directly with our investors. The hold period is for between three to five years and is becoming longer as investors want this,” says Wilder. “There can be a number of exit strategies including selling entire portfolios or breaking them up, listing a portfolio, put it into a REIT, all sorts of options. We underwrite deals with a multitude of exit strategies,” he says.
In the present negative interest rate climate, Moor Park Capital is looking for “high-teen IRRs, and cash-on-cash high single-digit returns”.
“We have a significant pipeline of deals such as leisure and healthcare sectors in the UK and are looking at the healthcare sectors in Germany and France,” says Wilder, adding that public bodies looking to cover budget deficits could also be a target.
www.moorparkcapital.com
