GE and Paradigm agree £100m Kwik-Fit sale & leaseback transaction

GE Real Estate UK (“GE Real Estate”) and Paradigm Real Estate Managers (“PREM”) have created a leveraged joint venture (the “Joint Venture”) to acquire 148 Kwik-Fit specialist fitting centres for £103.7 million reflecting a net initial yield of 5.3%.

The 148 property portfolio, which are located throughout the UK, have been acquired through a sale and leaseback transaction and are let to Kwik-Fit UK on 25 year leases with fixed uplifts in years 5 and 10. The properties are generally well-located in town centres and many offer redevelopment opportunities.

Simultaneous with the transaction, GE Real Estate and PREM have entered into a development agreement with Kwik-Fit, which will enable the joint venture to assess and pursue redevelopment schemes. Kwik-Fit will also have the opportunity to benefit from any redevelopment profit after the payment of a priority return to the Joint Venture.

Mike Rowan, Managing Director of GE Real Estate UK, said: “This is a highly innovative transaction which not only enables us to work with our new client, Kwik-Fit to fulfill its property requirements but also will enable us to create value from the portfolio together, over time. Furthermore, this deal dramatically extends our regional presence throughout the UK.”

Bill O’Hara, director of Paradigm Real Estate Managers Limited, said: “We are very excited by the opportunities this acquisition provides. The transaction provides a strong core income together with development options across the UK which provide the opportunity to work co-operatively with Kwik-Fit in obtaining relocations and maximising development value.”

Montagu Evans acted on behalf of the joint venture. Savills acted on behalf of Kwik-Fit.

RBS provided debt finance for the transaction.