UK’s best performing real estate fund in 2010, X-Leisure’s 30 percent stake will be acquired by William Mack founded asset manager Area Property Partners LP. The total value of properties in X-Leisure’s portfolio has been estimated at £528 million.
Area Property bought the stake of Jersey based X-Leisure for £65 million from UK’s biggest pension fund BT Pension Scheme (BTPS), said the manager of BTPS Hermes Fund Managers Ltd. Capital & Regional Plc, which owns 11.9 percent stake in X-Leisure, had tied up with Hermes to launch the real estate fund in 2004.
Head of real estate at Hermes, Chris Taylor said: “It’s not a sector that we wanted to hold any longer” from the asset manager’s London. New York based Area declined to comment.
X-Leisure portfolio had declined by 50 and 49 percent in the years 2008 and 2009 respectively, due to property market crash in the UK, IPD data showed. However, it returned a spectacular 46 percent in 2010 after UK property prices recovered for the first time in three years, beating 58 real-estate funds of UK to top the chart.
Capital & Regional and Hermes had infused £50 million in Q3, 2009 to recapitalize X-Leisure and also renegotiated loan terms with the funds existing lenders.
According to Mr. Taylor, the X-Leisure sale was a strategic move by Hermes to reduce its exposure in closed ended funds and gaining more control over BTPS’s £4 billion real estate pie. Mr. Taylor, who joined the firm in November 2010, plans to de-leverage the company and diversify its holdings outside Britain.