Dawnay Day Portfolio Changes Hands for $832M

LONDON-The 3.4-million-square-foot Dawnay, Day Group UK portfolio has changed hands. F&C REIT Asset Management and AREA Property Partners have exchanged contracts to purchase the fallen investment company’s holdings. The selling price was not disclosed but sources say the reported $832 million price tag is on the money.

The portfolio consists of 211 properties, 70% of which are retail. The Austin Reed store on London’s Regent Street is one of the major assets switching hands in the deal. The properties are located

The 211-property portfolio has been eyed by investors since last summer when Dawnay Day became one of many floundering companies. Over the summer, Norwich Union, the firm’s primary lender, placed Dawnay Day into administration and appointed BDO Stoy Hayward to administrate the portfolio.

At the time, the portfolio’s estimated rent roll was $62.4 million per year. It was reported that hundreds of companies expressed interest in the sale and 31 bids were received. In December, F&C REIT was awarded the portfolio.

“We were absolutely delighted to have secured the portfolio as there was plenty of interest in the market for it. The merger between F&C Investments and REIT Asset Management in 2008 brought together F&C’s fund management expertise with REIT’s entrepreneurial approach and strong investment track record producing enhanced and significant synergies to be able to target opportunities such as the acquisition of the Dawnay Day property portfolio,” says Leo Noe, executive chairman of F&C REIT.

This $832 million deal goes down in the record books as one of the largest to happen during the international economic meltdown. The deal is expected to close at the end of the month.

“We are pleased to be involved in the acquisition and successful financing of such a substantial portfolio at this challenging time,” says William Benjamin, managing partner of AREA’s European activities. “We are also pleased to be continuing our long and fruitful relationship with REIT and look forward to furthering our affiliation with their newly merged partnership with F&C.”

Brokers in the London market from Cushman & Wakefield; Grubb and Ellis; and Jones Lang LaSalle could not be reached for comment on the portfolio sale or its impact on the global markets.