APAM Advises Värde Partners on Acquisition of Bizspace Group

This article originally appeared on the CoStar News website. Read the full article here: http://www.costar.co.uk//en/assets/news/2015/May/Värde-Partners-goes-exclusive-on-Bizspace-Project-Spring-as-Catalyst-Capital-wins-Regatta-portfolio/
Värde Partners has entered exclusive negotiations to acquire Bizspace Group, the distressed logistics and office business space operator formerly owned by a Highcross fund, for north of £130m, CoStar News has learned.
The Bizspace Group operating business sale – dubbed Project Spring – is a distressed sale sold on behalf of legacy banks over the company’s defaulted debt held by RBS, HSBC and Nationwide through PricewaterhouseCoopers and Savills.
The exclusivity agreement for Project Spring – which CoStar News first reported on back in March – is one of two which have emerged this afternoon.
CoStar News has also learned that Catalyst Capital is under offer to acquire the Regatta portfolio, a pool of predominantly UK retail assets – including the 120,000 sq ft The Brooks Shopping Centre in Winchester – for £56m.
Catalyst’s purchase price reflects a net initial yield of around 8%, after topped up rents are included. More on the Regatta portfolio below.
The outstanding loan balance on the Bizspace Project Spring portfolio is thought to be higher than Värde’s purchase price. The company sale also includes 174 staff which manages the business. Värde is expected to close the acquisition all cash and seek financing thereafter.
There was a raft of underbidders for Project Spring including Telereal Trillium, Regus – in a believed joint venture bid with Bridges Ventures who together acquired comparable business Easyspace – and at earlier stages Goldman Sachs, Hansteen and Colony Capital.
Bizspace Group suffered a decline in revenue and operating profit during the recession of 2009-13 as its exposure to the SME sector in the Midlands and North resulted in pressure on rents and occupancy.
The Project Spring portfolio includes storage, office space, workshops, industrial units, serviced offices and meeting rooms, spread across 97 multi-let sites in England and Scotland over 5.87m sq ft and 6,004 units which is 76% weighted towards light industrial units.
The balance is comprised of 19% to offices and 5% to storage units, workshops and meeting rooms. By geography, the portfolio has concentrations in London and the South as well as core industrial centres in the North West and Yorkshire & Humberside regions.
Properties include: Greencroft Industrial Estate, County Durham; The Didcot Enterprise Centre, Didcot; Team Valley Business Centre, Gateshead; Bizspace Business Park, Wakefield; and Roden House Business Centre, Nottingham.
It is believed that Allsop and APAM were advisers to Värde on the operating business acquisition.
The Regatta portfolio was part of De Stefano Property Group’s property empire, founded by John De Stefano. Also in the Regatta portfolio is:
Market Place Mews, Henley on Thames – land assembly for a mixed use development scheme comprising 14 residential units and 16,000 sq ft of retail accommodation.
54 – 62 High Street, Bromley – comprises a parade of ground floor retails units with residential and ancillary accommodation above.
10 – 12, 64 – 88 Brewery Road, Kings Cross – a fully let terrace of seven 1970s industrial units with ground floor workshop/warehouse space and first floor office accommodation.
Angel Walk Shopping Centre, High Street, Tonbridge – a covered 1980s shopping centre comprising 11 ground floor retail units with storage facilities at first floor level.
The net operating income is sub £5.5m.
Underbidders on the Regatta portfolio were believed to include Project Spring winner Värde as well as Colony Capital and Clearbell. Regatta was sold through KPMG and CBRE.

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