AREA Property Partners to recapitalise UK listed retail fund

The New York-based firm is in advanced talks to help recapitalise the Junction retail park fund, according to a report in the Financial Times. If the deal completes, it would extend the relationship between AREA and the Junction’s fund manager, Capital & Regional.

AREA Property Partners, the New York-based firm, is reportedly in talks to inject equity into the UK’s Junction retail park fund.

The firm wants to take the majority of a planned placing of units, said the Financial Times, which is being engineered by Capital & Regional, the manager of the Junction fund to help alleviate pressure on loan to asset covenants.

It said AREA planned to take up part of units being placed at a value of more than €65 million.

AREA already has a relationship with Capital & regional. Last year, it agreed to take a 50 percent stake in the firm’s German property business for around €65 million. 

Capital & Regional, which is a listed property company, has been looking at ways to reduce debt. Options for the retail park fund included asset sales, a rights issue and a debt-for-equity swap, according to the report, which added that the Junction fund’s loan covenants complied with banking tests at the end of 2008.