MSREF-backed Multi sells assets for €1.3bn

The European shopping centre developer, 75 percent owned by Morgan Stanley, has sold 15% of its assets to fellow Dutch property company, Corio.

Multi Corporation, the Dutch shopping centre developer, has sold four properties and a number of development projects to publicly-listed retail property company, Corio, also from the Netherlands.

Multi, which was taken private by Morgan Stanley Real Estate Fund V International four years ago, said it had sold two centres in Germany, one in Spain and one in Portugal for €662 million, as well as a number of projects in Germany that require an expected investment of about €658 million.

News of the deal comes three months after Corio announced to shareholders it was in exclusive talks to buy part of Multi’s portfolio.

Corio said the deal made strategic sense because it meant it could add Germany and Portugal to its existing businesses in the Netherlands, France, Italy, Spain and Turkey.

Multi said it would be retaining a 5 percent stake in the portfolio, according to the parties. Under the terms of the deal, Corio is providing 90 percent of the finance for Multi for it to retain its interest, and, Corio has a call option to acquire the stake within five years.

Multi said the assets being sold represented 15 percent of its operation and development shopping centre portfolio. Upon closing the deal, the management team for two of the development projects will transfer to Corio.

In addition to the sale, the pair said they planned to form a joint venture company to build a “stronger partnership” combining development, management, leasing, marketing and funding activities.

The deal is not an exit for Morgan Stanley Real Estate Fund V International as Multi said it would retain the sale proceeds in its balance sheet and would be strongly placed to take “adequate advantage of current opportunities” for development and redevelopment.

Hans van Veggel, chairman of Multi, said in a statement: “For Multi this transaction is strategically important for the ongoing funding and development of the project pipeline. It also strategically aligns us with one of the leading retail property owners.”

Allen & Overy are advisors to Multi, while former co global head of Morgan Stanley Real Estate Investing, John Carrafiell, acted as consultant to Multi through Stenton RE Advisors Limited. Morgan Stanley was financial advisor.

Morgan Stanley’s $4.2 billion V International opportunity fund took over Multi when the company was called AM Development.

The Wall Street bank backed a pre-existing plan to change the company from being a pure trader developer – selling assets upon completion – to also include investment management activities.

At the time of its acquisition, AM said being part of MSREF would place AM Development in the “best possible position to finance its future growth”. It will, it said, have easier access to global capital markets and will be better positioned in the financial markets creating better opportunities to raise funding on more favourable terms.