The billionaire Tory donor behind furniture chain DFS, Lord Kirkham, today lost control of a £175 million property portfolio after it was snapped up by a joint venture including listed property firm LondonMetric.
Lord Kirkham — who is worth around £1.1 billion — sold the trading business of DFS to private-equity firm Advent for a reported £500 million in 2010. However, Advent did not buy Delphi Properties, a portfolio of assets including 22 retail warehouses, four distribution centres and the chain’s Doncaster head office, once valued at £250 million at the top of the market.
Delphi Properties — which still has Kirkham as a director — was in talks for more than year over £189 million in loans from a syndicate of lenders after the value of the properties plummeted during the recession.
Banks called in the loan and pushed Delphi into administration, forcing the firesale of the portfolio.
DFS — the UK’s biggest sofa seller — is trading strongly and is on course to open its 100th store shortly.
LondonMetric will own 30.5% of the joint venture with Luxembourg company LMP Retail Warehouse JV Property Unit Trust.
The 27 properties generate £17.3 million a year in rent. LondonMetric will pick up 4% of the annual rent roll as a management feee.
Its chief executive, Andrew Jones, said: “DFS is the leading UK furniture retailer and one of our strongest retail partners.
“The portfolio represents high-quality trading assets, with 46% of the rental income derived from open A1 consents. The portfolio is fully rented but contains significant value-accretive opportunities.
“We look forward to working with DFS across the operational portfolio to strengthen and lengthen the sustainable-income profile for our mutual benefit.”
LondonMetric was created a year ago through the merger of property companies Metric and London & Stamford to focus on out-of-town and distribution assets yielding better returns. Today’s move continues the wheeler-dealing by the firm following a string of acquisitions and disposals in recent months.
Earlier this week it sold Unilever House in Leatherhead for £75.8 million to a Malaysian buyer and recently spent £80.6 million on 10 out-of-town Odeon cinemas.
The value of its combined portfolio rose from £1 billion to £1.2 billion in the year to March 31 while pre-tax profits more than doubled to £39.9 million.
