US investor Realty Income Corp has agreed to buy real estate investment trust Ediston Property Investment Company's retail parks portfolio for £200.8 million.
The announcement follows EPIC's announcement of a strategic review on 16 March .
William Hill, chairman of EPIC, said in a statement: "Having considered multiple options, and after detailed analysis, the board determined a sale of the property portfolio to Realty Income was the best means of maximising shareholder value."
Following completion, EPIC said it expects to have net assets of approximately £152.2 million.
EPIC's board says if the sale becomes unconditional, it intends to seek shareholder approval for the voluntary liquidation of the company with a view to distributing substantially all of its net assets, with the target by the end of 2023.
EPIC added that the strategic review have been carried out in the face of ongoing challenges including low levels of liquidity in the ordinary shares, a small market capitalisation that limited the ability of larger investors to achieve their desired investment commitment and constraints on the company's ability to diversify across larger schemes in the retail warehouse market due to the relatively small size of the company. There were also cost inefficiencies from operating a subscale company.
As at 30 June, the portfolio of 11 retail parks was valued at £208.4 million and has a weighted average unexpired lease term of 5.2 years with contracted rental income of £16.5 million.
The parks are: Springkerse Retail Park in Stirling, Haddington Retail Park in Haddington, Pallion Retail Park in Sunderland, Widnes Shopping Park in Widnes, Barnsley East Retail Park in Barnsley, Prestatyn Shopping Park in Prestatyn, Kingston Retail Park in Hull, Plas Coch Retail Park in Wrexham, Tennent Street Retail Park in Coatbridge in Glasgow, Abbey Retail Park in Daventry and Clwyd Retail Park in Rhyl.
Realty, led by former investment banker Sumit Roy, has been the most active buyer of long-lease supermarkets and retail parks in the UK since entering the market in 2019 when it bought 12 Sainsbury’s supermarkets, jointly owned by British Land, for £429 million.
It has spent more than £2 billion buying supermarkets, DIY stores and more than 30 retail parks.
It is a US real estate investment trust listed on the New York Stock Exchange, and is a constituent of the S&P 500. Realty Income currently holds over 12,400 real estate properties which are primarily let to commercial clients under long-term net lease agreements.
As at 30 June 2023, Realty Income held, through RI UK 1 Limited and its subsidiaries, 241 properties in the UK, with a total leasable space of approximately 23 million square feet. As at 6 September 2023, Realty Income had a market capitalisation of approximately US$39.1 billion.