Caledonian Trust PLC Update on proposed sale of St Margaret's House (0614A)
May 24 2019 - 1:00AM
UK Regulatory
TIDMCNN
RNS Number : 0614A
Caledonian Trust PLC
24 May 2019
Information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR").
24 May 2019
Caledonian Trust plc
("Caledonian Trust" or the "Company")
Update on proposed sale of St Margaret's House
Caledonian Trust, the Edinburgh-based property investment
holding and development company, provides an update on its proposed
sale of St Margaret's House, 151 London Road, Edinburgh ("St
Margaret's" or the "Property") to Drum Property Group Limited
("Drum" or the "Purchaser") (the "Proposed Disposal"). Details of
the Proposed Disposal were originally announced by the Company on 5
February 2018.
Following recent discussions, Caledonian Trust and Drum have
agreed to amend the missives originally entered into on 2 February
2018 in relation to the Proposed Disposal (the "Missives"), in
order to allow Drum sufficient time to progress with the Proposed
Disposal.
Drum has been diligently pursuing its proposals for its
development and good progress has been made, including completing
the necessary investigation of the ground conditions and resolving
a mixture of technical challenges, including designing a new and
improved vehicular access to the site. Drum is now in a position to
finalise their proposals for submission of the requisite
applications for detailed planning consent.
Under the amended Missives, Drum is required to submit all of
the requisite planning applications for consent for its proposed
development by a date which is three months from 23 May 2019
(unless extended by mutual consent). Following the submission of
planning applications, Drum will have a period of twelve months to
secure such consent. Thereafter Drum will have a period of three
months in which to conclude a pre-letting of its proposed
development. In order to facilitate completion of the Proposed
Disposal, Caledonian Trust will then need to provide vacant
possession of the Property, which the Directors estimate will take
up to six months following the conclusion of the pre-let.
On the basis of the sequence of key events described above, the
Directors expect that completion of the Proposed Disposal will take
24 months from today's date.
The amended Missives contain a variation to the mix of units to
be sought within the planning consent for Drum's proposed
development. Drum is now required to obtain planning consent for a
proposed development comprising not less than 493 student bedrooms
(which was previously 429 student bedrooms under the original
Missives) and 98 flats (unchanged from the original Missives).
Whilst the number of student bedrooms required in Drum's planning
consent has increased, the total gross area for student
accommodation is unchanged, due to the removal of larger studio
flats overall and their replacement with more cluster units which
accommodate more bedrooms in the same gross area.
The amendments to the Missives will not affect the consideration
for the Proposed Disposal, which remains as GBP15.0 million
(exclusive of VAT), payable to the Company on completion of the
Proposed Disposal in cash.
The use of proceeds in respect of the Proposed Transaction
remains unchanged, in that the Company intends to use the net
proceeds to provide funding to accelerate the Company's existing
property development programme, re-invest into new property
developments, repay certain existing debt and provide general
working capital.
Under the amended Missives, there is still the potential for
Company to receive additional cash consideration should the
planning permission process result in the development comprising
additional student bedrooms and/or additional housing units.
However, certain of the reference criteria to be used in the basis
of calculation in respect of any additional consideration have been
changed to reflect the changes to the proposed mix of units within
the planning consent that Drum will seek, as detailed above. The
Directors remain of the view that it is unlikely that any
additional consideration will be received over and above the
consideration of GBP15.0 million referenced above.
St Margaret's is the Company's largest property and is located
in Edinburgh, approximately one mile from the Parliament and
Princes Street and adjacent to Meadowbank Stadium. The existing
building is a 92,000ft(2) multi-storey building that is currently
fully let out with the main tenants being Edinburgh Palette, a
registered charity, with the Registrars of Scotland renting 120 car
parking spaces. The Company has planning permission in principle
(PPP) at St Margaret's for a 231,000ft(2) mixed-use
development.
A book value of GBP8.0 million was attributed to St Margaret's
as at 30 June 2018 in the last audited accounts published by the
Company. For the year ended 30 June 2018 St Margaret's generated
gross rental income of GBP191,375 for the Company and an operating
profit of GBP155,949.
The Company will release further announcements on the Proposed
Disposal at the appropriate time.
Enquiries:
Caledonian Trust plc
Douglas Lowe, Chairman and Chief Executive Officer Tel: 0131 220 0416
Mike Baynham, Finance Director Tel: 0131 220 0416
Allenby Capital Limited
(Nominated Adviser and Broker)
Nick Athanas Tel: 0203 328 5656
Alex Brearley
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END
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