M7 Acquires Eastburn Estates and Active Commercial Estates Plc

20th December 2013 – M7 Real Estate, through its direct property owning subsidiary M7 Real Estate Investment Partners I Ltd, has acquired two property companies with total assets in excess of £75,000,000.

On a combined basis, the two companies hold 33 assets with a floor area of approximately 2,100,000 sq ft and a passing rent roll of over £8,000,000 per annum. The current average vacancy is circa 20%.

Eastburn Estates was originally a JV between M7 Real Estate and Westbrook Partners, which was established in November 2011, whilst ACE was a publicly traded fund managed by Alpha Real.

The acquisition was funded by senior debt from Santander and mezzanine debt from Oaktree Capital Management. M7’s equity was raised from a bond that it recently listed on the Channel Islands Stock Exchange.

Richard Croft, M7’s Chief Executive, said “We are delighted to have augmented our asset management business with a direct property owning subsidiary, fulfilling our long term ambition to be a direct property owner as well as a co-investing asset manager. The raising of the bond was an innovative way for us to raise capital and our partners in this transaction, Oaktree and Santander who provided the mezzanine and senior debt respectively, have been very flexible and commercial to deal with.

We believe that the amalgamation of the two portfolios will provide a high quality cashflow that will underpin a large number of asset management initiatives that have the potential to add substantial capital value”.

David Snelgrove of Oaktree added “ M7 is one of, if not the, leading multi-let industrial asset manager and we are delighted to help it facilitate its growth ambitions by providing this mezzanine loan. In addition to making equity investments in direct assets, non-performing loans and companies, Oaktree has specialist debt funds that provide high quality sponsors with access to mezzanine loans or preferred equity to help facilitate new acquisitions or recapitalizations.”

David Snelgrove of Oaktree added “ M7 is one of, if not the, leading multi-let industrial asset manager and we are delighted to help it facilitate its growth ambitions by providing this mezzanine loan. In addition to making equity investments in direct assets, non-performing loans and companies, Oaktree has specialist debt funds that provide high quality sponsors with access to mezzanine loans or preferred equity to help facilitate new acquisitions or recapitalizations.”