Cardiff’s iconic House of Fraser building purchased

Investment demonstrates ongoing appetite to acquire prime real estate

18 August 2016

Share this

The iconic House of Fraser building in Cardiff city centre has been acquired in an off-market purchase by Rosette Merchant Bank in partnership with Naissance Capital Real Estate from M&G Real Estate for £37m. The purchase has been made on behalf of Middle Eastern investors and represents a yield of 6.25%. House of Fraser has an unexpired lease term of 25 years at the listed building, which occupies a prime city centre location at 14-18 St Mary Street. Cooke & Arkwright advised Rosette Merchant Bank and Naissance Capital Real Estate in the deal, and M&G was represented by Allsop. Cooke & Arkwright has been retained by the new owners to provide Property Management services.

Rosette’s Chief Executive, Oliver Wynne-James said, “This deal demonstrates the ongoing appetite of Gulf-based investors to acquire prime real estate secured to globally recognised brands. The lease duration sees through the Brexit event and provides excellent income backed by deep value.”

This is the first acquisition made by Rosette Merchant Bank’s new Sharia-compliant, structured products arm, and was led by Adam Cavanagh who handles real estate deals that involve complex structuring. It is Naissance Capital’s second purchase since its launch in 2015.

Owner and Chief Executive Azeemeh Zaheer said, “We are pleased to be well positioned in the post-Brexit economy to take advantage of an opportunity to acquire and structure a transaction underpinned by strong real estate fundamentals in a historically low interest rate environment. Our clients have also benefited from a currency play, and take a long-term view on the UK economy.”

Graham Davies, Investment Director at Cooke & Arkwright said, “It is terrific to be involved in another land mark transaction in Cardiff and all the more so given the challenges of negotiating this deal during the Brexit referendum. This purchase brings many angles and opportunities for our client going forward over and above the attractive yield profile secured against the House of Fraser lease. It is also another example of how prime assets in central Cardiff generate strong investor demand and we are delighted to secure this purchase for our clients.”

Philip Angell, Director of Property Management said, “We are delighted to be retained by Rosette Merchant Bank and Naissance Capital Real Estate to provide property management services at this landmark city centre building.  We  look forward to working with them with the aim of adding value to this prestigious asset."

Cooke & Arkwright have been providing rating valuation advice to The Welsh Rugby Union Limited (“WRU”) and Millennium Stadium plc for many years. They were recently successful in achieving substantial reductions in the assessments of the Millennium Stadium, covering both the 2005 and 2010 rating list. These negotiated reductions yielded savings of c.£3.5m which, crucially, allows the WRU to re-invest in rugby throughout Wales. They advise the WRU across the group portfolio including the National Centre of Excellence in the Vale of Glamorgan. The valuation issues across the WRU portfolio are complex requiring a high level of understanding of the funding and finances of professional sport in Wales. Cooke & Arkwright’s experience and understanding of these issues and application to the rating valuation have yielded these substantial negotiated reductions. The WRU and the Millennium Stadium entrust our work to organisations with the required levels in experience and expertise in dealing with these complex issues. I am glad to say we have this expertise in Wales. I would have no hesitation in recommending ratepayers making use of this Welsh based expertise.

The Welsh Rugby Union Limited, Welsh Rugby Union Group