MEPC strikes pounds 300m deal with GE

MEPC, the UK's third- largest property group is realising pounds 300m in cash by selling 191 properties, mainly shops and offices, to the property arm of GE Capital Investment Services, the investment subsidiary of General Electric. As Clifford German reports, confirmation could come as early as this morning.

MEPC, the under-performing property giant which has been under constant pressure from shareholders dissatisfied with the lack of value in the company, has found a buyer for a portfolio of smaller properties, mainly shops and offices in the London and Manchester.

James Tuckey, chief executive of MEPC, promised six weeks ago to return pounds 300m to shareholders, roughly the same sum as will be realised by the deal with GE.

At the same time the group's American and Australian businesses were put up for sale with an estimated price tag of around pounds 580m. But these assets accounted for less than a third of MEPC's net assets of around pounds 1.9bn, yet they contributed 48 per cent of underlying profits in 1996. Selling them was expected to force MEPC to cut its dividend for 1997/98 from 20p to 12p. This may not now be necessary.

The smaller properties which make up the bulk of the new deal with GE were also surplus to requirements as MEPC increasingly focused on bigger property units, but were considered more difficult to dispose of. Selling them will allow MEPC to take advantage of the marked recovery in commercial property values in the UK and will remove some of the pressure to sell the American and Australian assets quickly.

GE has been active in the UK property scene since 1986 as a lender, investor and backer of joint ventures. Its current UK asset value is around pounds 700m and consists of a mix of properties, typically 35 per cent offices, 45 per cent in shops, shopping centres and retail parks and 20 per cent industrial. Since March 1994 it has completed 13 big deals including four this year but the MEPC deal will be the largest yet.

World-wide, GE Capital Services has a property portfolio of around $16bn, and GE Capital Services itself has assets of $227bn with 27 specialised businesses.

MEPC earlier this year rejected merger offers from Hammerson. In the summer it held talks with Burford, another underperforming property group with assets of around pounds 500m but they were quickly discontinued. Meanwhile, MEPC bought PSIT, a property investment trust, during the summer for pounds 247m. Some of PSIT's properties are expected to feature in the sale to GE.

MEPC last week announced it is to move from its prestige office in St James's Square in London, where rents are commonly pounds 50 a square foot to offices in Wigmore Street, where rents are around pounds 35 a square foot.

MEPC shares rose 3.5p on Friday to 519.5p, up 7p. It values the company at pounds 2.18bn.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want for the fitness tech, or the style
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own