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TORONTO, April 4, 2022 /CNW/ – Padlock Partners UK Fund I (the “Trust“) announced today that it has successfully completed the sale of a newly developed self-storage property located in the United Kingdom (the “Newmarket Property“) to a subsidiary (the “Buyer“) of Padlock Partners UK Fund II (“Padlock II“) for an aggregate purchase price of approximately £6,680,000. The Newmarket Property was sold by a subsidiary of the Trust (the “Seller“) to the Buyer pursuant to a share purchase agreement, whereby the Buyer agreed to acquire 100% of the outstanding shares of a subsidiary of the Seller holding the Newmarket Property (the “Acquired Subsidiary“).
Prior to the sale, the Acquired Subsidiary had entered in a loan facility with the Buyer (the “Loan Facility“) on June 24, 2021 and provided the Buyer, as lender, with a purchase option to allow the Buyer to purchase an interest in the Acquired Subsidiary, which was exercised by the Buyer in order to pursue the acquisition of the Newmarket Property discussed herein. Upon completion of this transaction, the Loan Facility is no longer the obligation of the Trust.
After giving effect to working capital adjustments and the balance owed to the Buyer by the Acquired Subsidiary on the Loan Facility in the amount of approximately £5,441,122, the adjusted purchase price of approximately £735,940 was satisfied by way of deferred consideration due and payable by the Buyer to the Seller on or before June 24, 2022. Such deferred consideration may be further adjusted for additional working capital adjustments as agreed to between Buyer and Seller.
The Newmarket Property is a recently developed self-storage property that is located in an affluent suburban market approximately 50 miles northeast of London. On November 11, 2020, the Trust completed its indirect acquisition of a freehold interest in the Newmarket Property. On June 24, 2021, the completion of the warehouse being constructed on the Newmarket Property was completed and the Trust took possession of the building. The project and office were completed during the financial year ended December 31, 2021 and the Trust began to lease up the units in the fourth quarter of 2021.
“We are happy to capture strong value for the Trust via this disposition which will allow us to continue to execute on our strategic development and operational priorities.” said Padlock Partners UK Fund I CEO, John Stevenson.
About Padlock Partners UK Fund I
The Trust is an unincorporated investment trust and was established for the primary purpose of investing in a diversified portfolio of income producing commercial real estate properties in the United Kingdom with a focus on self-storage and mixed-use properties. After giving effect to the sale of the Newmarket Property, the Trust holds properties in Bicester, Letchworth, Leighton Buzzard, Wimbledon, Chippenham and Enfield.
Forward-looking Statements
This news release contains statements that include forward-looking information within the meaning of Canadian securities laws. These forward-looking statements reflect the current expectations of the Trust regarding future events, including statements concerning the timing and terms of the deferred consideration payable to the Seller and the development and lease-up of the Newmarket Property. In some cases, forward-looking statements can be identified by terms such as “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “seek”, “aim”, “estimate”, “target”, “project”, “predict”, “forecast”, “potential”, “continue”, “likely”, “schedule”, or the negative thereof or other similar expressions concerning matters that are not historical facts.
Material factors and assumptions used by management of the Trust to develop the forward-looking information include, but are not limited to, the Trust’s current expectations about: the availability of properties for acquisition and the price at which such properties may be acquired; the availability of mortgage financing; the capital structure of the Trust; the global and United Kingdom economic environment; the timing and improvements or fit-outs of the Trust’s properties; foreign currency exchange rates; and governmental regulations or tax laws. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.
Although management believes the expectations reflected in such forward-looking statements are reasonable and represent the Trust’s internal projections, expectations and beliefs at this time, such statements involve known and unknown risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond the Trust’s control, could cause actual results in future periods to differ materially from current expectations of estimated or anticipated events or results expressed or implied by such forward-looking statements. Such factors include the risks identified in the final prospectus of the Trust dated August 13, 2020, including under the heading “Risk Factors” therein, as well as, among other things, risks related to the availability of suitable properties for purchase by the Trust, the availability of mortgage financing for such properties, and general economic and market factors, including interest rates, prospective purchasers of real estate, business competition, changes in government regulations or income tax laws. Readers are cautioned against placing undue reliance on forward-looking statements. Except as required by applicable Canadian securities laws, the Trust undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
SOURCE Padlock Partners UK Fund I
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