The proposed merger of Sun Alliance Group and Royal Insurance Holdings to form Royal Sun Alliance will create a combined property investment portfolio worth more than £3bn, says Sun Alliance Group Properties’ managing director Jonathan Coote.
“This will be one of the larger institutional portfolios in the UK, and it will be quite a challenge to manage it”, he said. “The bulk of the portfolio is held by policy owners’ funds and will remain relatively undisturbed, but there will be opportunities to look at the portfolio creatively and undertake some rationalisation.”
Besides the investment portfolio, both firms occupy large amounts of offices for operational purposes. Sun Alliance has a significant presence in Horsham, West Sussex, and in Bristol. The Royal’s main centre is in Liverpool with a smaller presence in Bristol. One Bristol agent estimates that the insurers occupy a combined total of more than 27,870sq m (300,000sq ft) in the city.
Both have headquarters in the City of London: Sun Alliance in St Batholomews Lane, and the Royal in Cornhill. The Royal also has over 400 High Street branches, including estate agents William H Brown, Barnard Marcus and Fox & Sons. Sun Alliance owns insurance brokers Swinton.
Sun Alliance, which had a big direct development operation in the late 1980s, now owns a development site with consent for 8,000sq m (86,114 sq ft) at 1 King William Street in the City of London, where demolition is in progress. The insurer has just completed an office building for its own occupation in Australia.
The merger would create by far the largest general insurer in the UK and the sixth largest life insurer. The merger could also result in 5,000 jobs losses over the next few years. Sun Alliance employs over 2,000 people in greater Bristol and the Royal about 250.
” It’s early days to say what will happen to individual properties,” said Coote.”We are looking at a macro-level business merger where property, although important, is not driving the activity. We hope to have a clearer picture in the next three to four months.”.
EGi News 09/05/96
