Ares Lines Up £65M Deal To Acquire Shaftesbury Capital Portfolio

After it abandoned attempts to sell a £250M tranche of its Fitzrovia portfolio last year, Shaftesbury Capital has found a buyer for around £65M of London-based assets, React News reports. 

Ares Management is to acquire the majority of the REIT’s holdings in the Fitzrovia area, which were among those put up for sale last summer as part of the company’s capital recycling programme, according to React.

The assets are spread across Charlotte Street and Goodge Street and are predominantly independent restaurants, cafés, pubs and bars, plus some office space. 

In total, Shaftesbury Capital owns circa 670 buildings in and around London’s West End and has been seeking buyers for about 5% of its property portfolio identified as noncore from its £5B real estate holdings. 

The landlord had been seeking offers for a larger portfolio, which included restaurants and bars, offices, stores and apartments that were valued at about £118M at the end of June, according to its financial update at the time, as the first phase of plans to dispose of about £250M of properties. 

The proposed Ares acquisition is understood to exclude the pubs and a number of other assets. Included in the deal, which totals around 100K SF, are 11 office properties, seven stores, 28 hospitality and leisure outlets, and 56 residential apartments. 

In November, Shaftesbury Capital, which had appointed CBRE to lead the disposals, scrapped plans to offload its noncore portfolio after bids fell below its expectations. Instead, it investigated selling off the assets individually or in smaller asset bundles.

The decision to sell these assets followed the completion of Shaftesbury’s merger with fellow London landlord Capco in March 2023 and the subsequent decision to focus on areas including Covent Garden and Soho.

In December, Shaftesbury Capital signed a £300M unsecured loan agreement with an initial maturity of three years and an option to extend by up to two years. The company said that combined with existing cash resources, the funds were to be used to repay the remaining £376M balance of an unsecured loan arranged at the time of the merger to repay Shaftesbury PLC secured bonds. 

JLL is advising Ares Management on the Fitzrovia portfolio deal.