International law firm Lovells has advised Henderson Global Investors Limited (Henderson) on the establishment of a close-ended real estate fund to acquire UK designer outlet malls. The fund has just completed the purchase of three designer retail malls for £365m in what is likely to be one of the largest property transactions in 2008.
The UK Outlet Mall Partnership, a Scottish limited partnership, acquired the designer outlet centres in Cheshire Oaks, Swindon and Bridgend from a consortium comprising BP Pension Fund, Axa and Morley Fund Management. Equity for the acquisition was provided by German, French, Dutch and US investors. Senior debt funding was provided by Bayerische Landesbank. The fund is targeting an internal rate of return of 10% per annum and a distribution yield of 6% a year.
James McDonald, a Partner in the Funds practice at Lovells, was assisted by Sarah Threlfell (Associate, Financial Institutions Group) and led a cross-border, inter-disciplinary team comprising Kevin Ashman (Partner, Tax), Aaron Burchell (Associate, Tax) in London, Herve Israel (Partner, Tax) and Nicolas Not (Of Counsel, Tax) in Paris, Michael Dettmeier (Partner, Tax) and Heiko Gemmel (Senior Associate, Tax) in Dusseldorf, Jason Kaplan (Partner, Tax) and Nicole Landry (Associate, Tax) in New York and Anton Louwinger (Tax advisor) in Amsterdam. Francis Giacon (Partner, Real Estate), John Condliffe (Of Counsel, Real Estate), Kay Booth (Partner, Real Estate Finance) and Cheryl Enayati (Associate, Real Estate Finance) completed the team.
James McDonald said today:
"This has been a complex and interesting deal. As well as the acquisition of the property assets, we have also advised on the development and implementation of an optimal structure for holding these property assets for investors in the UK, Germany, France, Holland and the US.
Perhaps as a response to somewhat difficult market conditions, it has been necessary to be especially sensitive to the needs of particular investors resulting from their domestic fiscal or regulatory regimes.
For this reason, the expertise of our global tax structuring team has been essential to the successful completion of this work."
The work carries on from the launch of two property funds in 2004 (the Henderson Central London Office Fund and the Henderson UK Shop Fund) upon which Lovells also advised.
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With over 3,000 people operating from 26 offices in Asia, Europe and the United States, Lovells is one of the world's leading international law firms. We advise many of the world's largest corporations, financial institutions and governmental organisations. We regularly act on complex, multi jurisdictional transactions as well as some of the most high profile commercial disputes. Lovells (the "firm") is an international legal practice comprising Lovells LLP and its affiliated businesses. Lovells LLP is a limited liability partnership registered in England and Wales with registered number OC323639. Registered office and principal place of business: Atlantic House, Holborn Viaduct, London EC1A 2FG.
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