No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - CLS Holdings announced on Thursday that it has agreed to sell its student accommodation asset at Spring Mews in Vauxhall, London, for 101.1m in cash to a joint venture between Rosethorn Capital Partners and Barings.
The London-listed firm said the agreed price was in line with the property's December valuation, and represented an uplift of 8.1% compared to year-end 2023.
Constructed by CLS in 2014 as part of its mixed-use Spring Mews development, the student block had historically maintained full occupancy, aside from the pandemic period, and delivered record profits in 2024 following a refurbishment.
Completion of the sale was expected in May.
The company said the disposal would enable it to restructure upcoming debt maturities.
Proceeds would be used to repay 85.8m of debt secured against New Printing House Square in Holborn and Artesian in Aldgate, which would now be substituted into an existing Aviva Investors portfolio loan.
That loan, fixed at 2.54%, matures in 2030 and 2032.
The refinancing would allow CLS to retire more expensive debt while retaining the favourable terms of the Aviva facility.
CLS said the transaction was expected to be marginally earnings enhancing, reducing the company's pro forma loan-to-value ratio from 50.7% to 47.9% and lowering its year-end cost of debt by over 20 basis points.
"Spring Mews Student has been a very successful development for CLS, and we are pleased that Rosethorn and Barings will become the owners as the scheme enters its next phase as an integral and continuous part of our Spring Mews estate in Vauxhall," said chief executive officer Fredrik Widlund.
"The sale demonstrates CLS' ability to develop, operate and realise value through its structured, proactive approach and, at the same time, deliver on several strategic priorities by addressing upcoming loan maturities and reducing LTV."
At 0842 GMT, shares in CLS Holdings were up 3.46% at 72.94p.
Reporting by Josh White for Sharecast.com.