Business
Re Joint Venture
Re Joint Venture.
About this update from Workspace Group Plc
[{"type":"text","content":"\n \n\n\n\n\n\nRNS Number : 7482B Workspace Group PLC 24 February 2011 \n \n\n \n \nWORKSPACE GROUP PLC ANNOUNCES JOINT VENTURE \nWITH THE BLACKROCK UK PROPERTY FUND\n \n \nWorkspace Group PLC (Workspace), the leading provider of space to small and medium sized enterprises (SMEs) across London, announces today that it has entered into a joint venture (JV) with the BlackRock UK Property Fund to be known as the BlackRock Workspace Property Trust (BWPT). \n \nBWPT will invest in freehold properties in London or adjacent South East locations which are high income yielding multi-let industrial or office buildings where there is potential for further rental growth and added value from active asset management. The target lot size range is £5m to £20m, although larger and smaller opportunities will be considered. \n \nWorkspace will be responsible for sourcing and recommending investment opportunities for BWPT. All BWPT owned properties will be managed by Workspace and will be operated under the Workspace logo and brand.\n \nThe JV partners will commit up to £100m of equity into BWPT, with the BlackRock UK Property Fund committing up to £79.9m (79.9%) and Workspace up to £20.1m (20.1%). Once these funds have been committed there is the option for further investment subject to the approval of both partners. The term of the JV is five years with an option for two one-year extensions.\n \nBWPT will initially be seeded with a portfolio of eight properties (for details see note 1) purchased directly from Workspace for £35m at a net initial yield of 8.2%. These properties are predominantly light industrial estates across London and the purchase price represents the portfolio's December 2010 valuation as determined by CBRE, independent valuers. \n \nDuring the investment period, which is the shorter of 18 months from close or until the remaining funds have been invested, Workspace has agreed to give BWPT first refusal on acquisition opportunities which meet the Trust's property criteria. \n \nWorkspace will receive a property management fee, together with a performance fee based on the relative performance of BWPT against the comparator IPD index and a minimum IRR of 10% pa over the life of the Trust.\n \nCash proceeds of £28m, net of the £7m equity investment, from the s...