Client: House of Fraser - Jenners
Our investment agency team was instructed by House of Fraser to orchestrate a discreet sale-and-leaseback of its Jenners store located on Princes Street in Edinburgh. One of the city’s most iconic buildings and over 175,000 sq ft in size, the investment had a price tag of just over £37m. Timed to coincide with House of Fraser's purchase of the Jenners' business, the deal was shrouded in secrecy and timescales were extremely tight.
The property was placed under offer to an Irish institution on the basis of a three-week exchange. However, almost two weeks into the due diligence process, it became apparent that the deadline for an unconditional exchange would be missed, and the vendor was not prepared to defer this by even one day.
Faced with a difficult decision, we drew upon our collective experiences and advised House of Fraser to withdraw from the transaction. We knew that even an eleventh hour attempt to persuade them to renegotiate would fall on deaf ears, leaving our client with the unpalatable prospect of funding the Jenners' company purchase out of its own resources. Meanwhile, we identified and delivered an alternative prospective buyer at precisely the same level, who had just missed out elsewhere on another deal. As such they could demonstrate that funding was in place and all approvals could be quickly removed to meet the deadline, which was just over a week away.
Terms were agreed, both the proposed buyer (a private Irish investor) and House of Fraser instructed solicitors to work through a bank holiday weekend. The transaction took six working days from start to finish, exchanging on the deadline date, at a price reflecting a net initial yield of 4.45%.
To secure, successfully, a replacement purchaser within a very demanding timescale is indicative of the challenges we face daily, and we pride ourselves on our ability to meet tight deadlines.
The above transaction, coupled with the success on Kendals in Manchester resulted in Gerald Eve receiving further sales instructions from House of Fraser in Wolverhampton for £47m and Birkenhead for £9m to tie in with the company purchase of the Beatties' department store chain.
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