Max Property Group plc : New financing to boost acquisitions firepower


 
TIDMMAX 
 
Max Property Group Plc 
("Max Property") 
 
New financing to boost acquisitions firepower 
 
Max  Property  Group  Plc  ("Max")  announces  that  it has arranged a  GBP32m non- 
recourse  loan  from  Longbow  Investment  No2  Sarl  ("Longbow"). Max now has a 
substantial   war  chest  of  c.   GBP90   m  of  uncommitted  cash  allocated  for 
acquisitions  and has instructed its manager, Prestbury Investments, to actively 
seek  new  opportunities  where  attractive  returns  can  be  delivered through 
intensive asset management. 
 
The loan from Longbow will be secured against a previously unencumbered 420,000 
sq ft portfolio of five office properties in Manchester, Horsham, Milton Keynes, 
Newbury   and  Fareham.   This  follows  a  successful  campaign  by  Max  since 
acquisition  involving 18 lettings totalling 120,000 sq ft at these investments, 
substantially  increasing and stabilising the income  on this portfolio which is 
now  83% occupied.  The Longbow loan  will enable Max to  continue to manage the 
properties to take advantage of the further performance expected to be generated 
in  this portfolio and at the same  time provides further opportunity to acquire 
further  assets in the market  with the recycled capital.   With a loan to value 
ratio  of 80%, Longbow will receive a priority  paid coupon of 9% p.a. and, once 
Max  has also received a 9% p.a. return on its equity, is entitled to 30% of net 
profits on sale.  The loan matures in September 2016. 
 
Max  originally acquired a portfolio of  ten provincial office properties with a 
high  vacancy rate of  48% in January 2010 for   GBP39m cash, including costs.  Two 
properties  have been  sold for   GBP6.7m and,  following the  financing, a further 
214,000 sq ft of provincial office assets, located in Milton Keynes and Bristol, 
remain uncharged pending further asset management initiatives. 
 
The  financed properties offer  further upside with  a remaining 70,000 sq ft of 
vacant  space to be let,  30,000 sq ft of which  is already refurbished.  Dakota 
House  at  Concord  Business  Park,  Manchester comprises the sole unrefurbished 
accommodation  and is  being marketed  as a  pre-let opportunity following Max's 
recent letting success within the park to Shell UK and Thyssenkrupp Elevators. 
 
Mike Brown CEO of Prestbury Investments, Max's property manager, commented: 
 
"We  are very pleased to develop a relationship with the Longbow team. High loan 
to  value finance  from alternative  sources has  an important  role to  play in 
supporting  property entrepreneurs in the  current economic environment.  Unlike 
an  outright  sale,  this  financing  has  allowed  Max  to recycle equity after 
stabilising the portfolio while retaining most of the upside where further value 
remains to be added." 
 
Kevin Cooper Joint Managing Partner of Longbow Real Estate Capital LLP said "The 
diversity  of the income profile  of the portfolio; Max's  success in letting up 
the  vacant units since acquisition; and the quality of the management team were 
key  to  our  investment  decision.   The  current  constrained  nature  of  the 
conventional  real estate financing market is  opening up good opportunities for 
Longbow   to  deploy  capital  and  we  are  delighted  to  have  established  a 
relationship with Max on terms that work for both parties". 
 
22 May, 2012 
 
ENQUIRIES: 
 
 Prestbury Investments LLP           Tel: 020 7647 7647 
 
 Mike Brown 
 
 
 
 College Hill                        Tel: 020 7457 2020 
 
 Mike Davies 
 
 Helen Tarbet 
 
 
 
 Oriel Securities (NOMAD)            Tel: 020 7710 7600 
 
 Mark Young 
 
 
 
About Max Property Group Plc 
 
Max Property Group Plc ("Max" or the "Company") is a Jersey resident real estate 
investment  company.  Its Board, chaired by Aubrey Adams, is exclusively advised 
by  Prestbury Investments LLP, which is owned and  managed by a team led by Nick 
Leslau and Mike Brown. 
 
The  Company's strategy is  to exploit cyclical  weakness in the  UK real estate 
market  through opportunistic  investment and  active management  with a view to 
realising   cash   returns   for   shareholders  over  an  investment  cycle  of 
approximately seven and a half years from its listing in May 2009. 
 
About Longbow Real Estate Capital 
 
Longbow  Real Estate Capital is 51% owned  by FTSE 250 listed mezzanine investor 
Intermediate  Capital Group  Plc which  is the  largest independent  provider of 
mezzanine finance in Europe. 
 
 
 
 
 
 
 
This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
 
Source: Max Property Group plc via Thomson Reuters ONE 
[HUG#1613704]
Max Prop (LSE:MAX)
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