Details of Friars Walk sale revealed
Posted on Wednesday 12th July 2017
Full details of the successful sale of Friars Walk by developers Queensberry Real Estate are now in the public domain.
A report to next week’s meeting of Newport City Council’s cabinet setting out the terms and conditions of the sale has now been published.
Financial and legal information had to remain commercially confidential until the deal had been completed.
However, the report contains a detailed analysis of the sale and shows that the Talisker deal represented best value because it enabled the council to fully pay off its borrowing costs to finance the loan to Queensberry to develop the long-awaited retail and leisure scheme.
The council had incurred around £82 million of borrowing charges and interest in order to finance the development loan and it received a net capital receipt of approximately £84.5 million on completion of the sale in settlement of the Queensberry loan and interest.
Although the balance of the loan debt and “rolled-up” interest from Queensberry has technically been written off, a rent share agreement with Talisker will ensure the repayment of the full interest payment that was due.
As part of this on-going partnership with Talisker, the council has also given a commitment to contribute an investment subsidy of up to £500k per annum towards the rental income, but this should only be required for the first few years and the council will then have a share of future growth.
Over future years, the council will receive a guaranteed additional £7.5 million as a result of this rent-share agreement, making a total return of approximately £92 million.
Cabinet are being asked to note and endorse the contents of the report. The full report can be found on the council and democracy pages at www.newport.gov.uk