Kier acquires sole ownership of property portfolio for £91m

Property giant purchases Lloyds’ 50% stake in jointly owned portfolio

Article posted: 18 Apr 2011

Kier Group has announced that it has agreed to acquire Lloyds Banking Group's 50% interest in their jointly owned portfolio of real estate assets. The assets are owned by Kier Developments Limited and its subsidiaries. As a result of the transaction, Kier Property Limited, a subsidiary of Kier, now owns the entire issued share capital of Kier Developments.

The aggregate consideration for the transaction which is payable to the sellers (Bank of Scotland plc and Uberior Ventures Limited, each of which forms part of Lloyds Banking Group) is £91m. The consideration, which was based on an independent valuation of the assets, also releases Kier Developments and its subsidiaries from all debt payable to Lloyds Banking Group.

The portfolio of real estate assets includes two prime offices in Central London, one in Cavendish Place, the other comprising office space in Mayfair on Savile Row.

In addition there is a mixture of commercial and residential land in Frimley, Swindon, Southampton, Heathrow, Uxbridge and Ashford, a retail development in Chichester and two industrial units in Weybridge, which are expected to be sold shortly, and a further industrial unit in Romford.

Kier intends to pursue a strategy of developing and disposing of the assets, and has re-valued the portfolio accordingly, and as a result expects to generate positive returns from the portfolio. This strategy also means that the transaction is not expected to have a material impact on the Kier Group's average cash position.

Kier Group chief executive, Paul Sheffield, commented: "We would like to thank Lloyds Banking Group for its involvement in the joint venture over the last nine years. We are delighted to conclude this transaction, which will offer exciting development opportunities and create significant value for the whole Group over the next few years."

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Posted by Sam