US REIT is targeting European sale-and-leaseback deals via UK manager
A private US REIT that raises capital from retail investors has appointed Moor Park Capital Partners to invest in European sale-and-leaseback transactions. American Realty Capital started raising equity last month for private REIT American Realty Capital Global Trust and has retained Moor Park exclusively to invest 40% of the trust in European deals.
It is ARC’s first step outside its home market, where it runs other specialist trusts, such as a New York recovery fund and a healthcare fund. Its fund raising target is $1.5bn, 50-60% of which will be invested in the US.
Jagdeep Kapoor, a Moor Park founding partner, said talks with ARC started a year ago. He and co-founders Gary Wilder and Shemeel Khan have focused on big sale-and-leaseback deals since leaving Nomura to set up Moor Park in 2006.
Their main deal was structuring the sale and leaseback of 378 Banco Sabadell branches in Spain in 2010 for seven private equity investors, including London & Regional, Matterhorn Capital and Ombeter Properties. Kapoor said Moor Park would still work with institutional and private equity clients, but ARC would invest in smaller deals, from £5m to £75m, to spread credit risk.
Its ideal assets are single-tenant buildings with leases of 10 years or longer, in all sectors and initially in Germany, the UK and France. “ARC gives us access to those smaller deals for the first time,” Kapoor said. Acquisitions will be geared up to 45%.
ARC is believed to be seeking 7% income returns for investors. Kapoor said: “The product gives investors a nice cash-on-cash yield with a monthly coupon and the principal back at the end.” Moor Park also advised the investors in a £700m sale and leaseback of 12 Spire Healthcare hospitals, in a deal that was closed this month.