Redefine completes purchase of Aegon property portfolio

Redefine International completed a major acquisition on Wednesday, announcing it had reached the final point on buying the second tranche of the Aegon UK (AUK) portfolio for a price of £204.7m net of costs.

The FTSE 250-listed real estate investment trust said the total purchase price of the portfolio, including Banbury Cross Retail Park and after adjusting for the disposal of 16 Grosvenor Street, London, was £460.7m net of costs.

To support the funding of the transaction, Redefine said it utilised £252m of bank debt, with the balance funded from existing cash resources and the proceeds from the recent £115m equity placement concluded on 23 February.

Redefine's board said this resulted in an initial margin on the AUK facility of 1.9% over LIBOR.

"The conclusion of this transformational off-market portfolio acquisition is a considerable achievement, particularly in a market which is highly competitive for such institutional quality assets," said Redefine CEO Mike Watters.

Watters said Redefine International's portfolio had now increased by 50% to £1.5bn, and a significant, resilient and long term rental stream had been added, supplementing existing income.

"The portfolio also presents a range of future opportunities for enhancing rental income and value through active asset management," he added.

"We are confident that this acquisition puts Redefine International in a strong position at this point in the property cycle and we are looking forward to updating the market on the early progress made on the asset management plan as we work to integrate the AUK assets into our existing portfolio."

Redefine's board said the AUK portfolio significantly increased the company's existing portfolio, adding largely institutional-quality properties, with asset management progress already exceeding initial expectations.