It's likely to have forfeited its deposit of 10% of the £47m purchase price
FRASERS Centerpoint has pulled out of a £47 million (S$106 million) deal to buy 120 apartments at the site of English football club Arsenal's old stadium, likely forfeiting its deposit.
Highbury Holdings - a unit of the holding company that owns Arsenal Football Club - has now sold the apartments plus some 25 others for £41.4 million to London & Stamford, an AIM-listed property group.
Reports in February said that Frasers, a unit of listed Fraser & Neave, had put down a 10 per cent non-refundable deposit for flats in the Highbury Square project but was unwilling to pay the rest in full upfront.
It instead proposed to pay the sum, reportedly £15 million, on a deferred schedule but the offer was blocked by one of the club's banks.
Frasers yesterday said that it was 'pleased' the units had been sold. 'The price achieved is a clear indication that the market has turned in London and that there is significant interest from investors in acquiring prime London property,' a spokeswoman told BT. 'Our decision not to complete enables us to focus on our existing property portfolio and our direct development projects in London.'
A report in the Telegraph newspaper said that London & Stamford bought the flats at a 'knock-down' price discounted to the market by almost 20 per cent. Analysts said the price paid worked out to about £400 per square foot, compared to the market rate of about £500 psf.
There are 655 units in the development, built on the site of Arsenal's 93-year home ground and which retains the historic facade of some of the spectator stands and the marbled entrance hall.
The club went deep into debt to finance the development at the height of the housing boom in London but has since struggled to complete sales amid poor economic conditions. Some 32 per cent of the units are still available, the club said on Monday.
An FT report said that Arsenal has now booked cumulative sales of £172 million and has also managed to extend the term of a bank loan, which has been reduced from £133 million to £47 million.
Arsenal on Monday announced record net profit of £35 million for the year to May 31, up £6.5 million from a year ago. Turnover including property sales increased to £313 million - the largest ever recorded by a British football club - but does not include £42 million received this summer from the sale of two players.
Source: Business Times, 1 Oct 2009
No comments:
Post a Comment