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Press Release

Carlyle in Talks to Buy £300m Mall Assets

04 April 2008

Carlyle Group and developer Bride Hall are in talks to buy three shopping centres from The Mall Fund for around £300 million.

The pair are in negotiations to buy the 372,000 sq.ft Epsom mall, the 192,000 sq.ft Edgeware mall and the 242,000 sq ft Chester mall. The net initial yield is close to 6%.

The Mall Fund, which is jointly managed by Capital & Regional and Morley and which owns 23 centres, instructed Strutt & Parker in February to sell the centres.

Capital & Regional’s troubled Mall shopping centre fund has bought itself some breathing space with the sale of three of its centre – albeit at a reduced price – and a corporate refinancing which means the fund is no longer in danger of breaching loan covenants.

Carlyle bought the properties with Bride Hall Holdings and will inject them into its Carlyle Europe Real Estate Partners III Fund. The purchasers expect to invest up to £50 million in the portfolio and have already identified several asset management opportunities.

The Mall, Chester is a 243,000 sq.ft single-level covered scheme situated in Chester’s historic centre which dominates the city’s retail provision. Attracting around 200,000 shoppers weekly, the centre is home to over 80 stores, including River Island, H&M, Monsoon, Topshop/Topman and Habitat.

The Mall, Edgware provides 190,000 sq.ft of retail. Attracting around 140,000 shoppers weekly, the centre is fully let with tenants including Sainsbury’s, Marks & Spencer, W H Smith and Boots. A masterplan is being drawn up with the centre forming part of a wider retail-led, mixed-use development.

And The Mall, Epsom comprises 362,000 sq.ft of retail with an average weekly footfall of 140,000. The centre is anchored byu House of Fraser, Marks and Spencer and Waitrose with other tenants including Next, H&M, New Look and Boots.

Carlyle MD, Robert Hodges, said: These three acquisitions, the first for CEREP III since its closing, represent strong additions to our UK portfolio and underline our intentions to take advantage of opportunities that arise to expand our retail portfolio. Our planned development programmes will significantly increase the attractiveness of each centre to its tenants and shoppers alike and underline that we have both the expertise and firepower to identify and exploit opportunities to create value in the retails sector.

Conroy Laurie, Strutt & Parker and Savills advised the purchasers.