The terms of the leases have been structured to ensure maximum operational flexibility for M&S. The initial term expires in March 2027 and the initial rent payable by M&S is £24.6 million ($35.7 million) per annum. But rather than face the traditional five-yearly rent reviews, the leases allow for fixed annual rent increases of between 1.5% and 1.9%.
At the same time, M&S has the ability to vacate up to one third of the properties without penalty, and it also has the right to renew any of the leases for terms of up to 40 years. Marks & Spencer and Topland will share any profits accruing from the redevelopment of the vacated properties.
M&S Executive Director Robert Colvill said: 'The quality of this portfolio and the unique partnership opportunity has attracted a high level of interest from a broad range of potential investors. Topland's expertise will enable us to extract further value from our estate whilst providing the occupational flexibility needed to support our revitalised trading plans.'
And Colvill made it clear that this would not be the last time M&S raised capital from its property assets. He said the company was looking at the securitisation of other portfolios of stores and the sale of non-operational properties.
Morgan Stanley and Healey & Baker advised Marks & Spencer.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
