Low-profile private investor Joseph Ackerman has emerged as one of three shortlisted bidders for the first in a series of sale-and-leasebacks with Royal Bank of Scotland.
Ackerman is up against Jamie Ritblat’s Delancey and outsourcing specialist Mapeley for the deal, which RBS is eager to conclude this month.
The portfolio is made up of around 600 units in 300 properties, typically high-street bank branches with flats above, with a total potential income of £10m. About half is surplus to the bank’s requirements.
The value of the deal is around £180m to RBS. The purchaser is expected to pay £110m for 150 freeholds – a sub-6% yield, said one bidder. In addition, RBS will pay the purchaser a £70m premium to assume lease liabilities on the other 150 properties.
It is likely to be followed by up to three further sell-offs worth as much as £300m in total.
Ackerman is an active buyer on the auction circuit, but rarely sells his property. His Edgware-based private property company Ackerman Group owns a large portfolio of retail and residential property worth several hundred million pounds.
If either Delancey or Mapeley outbid him for the RBS deal, they were likely to break up the portfolio, said a source, who added: “It’s a super auction lot.” Smaller properties let to banks are achieving yields of sub-4% at auction, against the market average of sub-5%.
For the operational properties, RBS is promising to sign leases of mostly 20-plus years. Highlights include the leaseholds of the NatWest branches at 208 Piccadilly, W1, and 508 Edgware Road, NW9.
“People take the view that a bank will never go bust. A lot of buyers will also like the idea of buying the branch they’ve banked at for the past 30 years,” said the source.
Nelson Bakewell and Ernst & Young are advising RBS.
References: EGi News 04/04/05
