Four investors have been shortlisted for Boots’ £300m-plus sale-and-leaseback.
They are REIT Asset Management, a Teesland joint venture with Mark Pears, Sol and Eddie Zakay’s Topland and a fourth unknown investor.
Cushman & Wakefield Healey & Baker and Reid Rose Gregory, which are selling the portfolio, have been whittling down offers from almost a dozen parties over the past two weeks.
REIT, Teesland and Pears, Topland and the fourth bidder will now present their proposals to Boots, which hopes to complete the sale of its 300-strong portfolio by 4 July.
Bids of more than £310m were submitted for the portfolio. Interested parties were asked to submit four separate bids for four differently tiered deals, with terms ranging from 15 to 20 years and allowing Boots to vacate either 1.5% or 3% of the rent roll in any calendar year.
The structure of the deal has come under fierce debate because of restrictions placed on potential purchasers, including the stipulation that they cannot securitise the income stream or break up the portfolio.
Andrew Vaughan, managing director of Redevco, said his company decided not to bid for the portfolio because of the restrictions.
“We decided not to go forward with Boots because of the ban on forward sales. We would not want £300m of property let to one tenant. It restricts your ability to manage your assets,” said Vaughan.
“The pricing and the inability to trade the portfolio is what put us off. We would have wanted to sell down a bit,” he added.
References: EGi News 13/05/05
