Capital & Regional disposes of Buttermarket Centre

Capital & Regional has completed the sale of the Buttermarket Centre in Ipswich to the National Grid Pension Fund for £54.7m, at an equivalent yield of 5.9%, a deal it expects to make an internal rate of return of more than 40% on the total investment.

The centre was held by the company in a 50:50 joint venture with Drump Property Group. The initial consideration for the JV was £19.6m after repayment of associated debt of £19.9m. A further consideration of £8m is contingent on the completion of the letting programme for the centre, which the company is confident will be achieved.

The net proceeds to Capital & Regional are expected to be £13.5m, £9.8m of which was received on completion.

The investment in the joint venture had a carrying value in the Group's accounts at 30 June 2016 of £13.6m and Capital & Regional will recycle the proceeds from the sale into new investment opportunities.

Chief executive Hugh Scott-Barrett said: "The completion of such a complex and transformational project in just a two year period is a great showcase for our particular expertise and asset management skills, and the IRR we have delivered is a strong testament to the success of the investment.

“Following on from the successful sale of The Mall, Camberley, this disposal provides us with significant capital to reinvest into higher yielding opportunities."