Mapeley

Soros consortium wins outsourcing contract for sale-and-leaseback of more than 6m sq ft of bank's estate.

Mapeley, the George Soros-led outsourcing consortium, has won its second giant property outsourcing contract in less than a month.
As Property Week went to press, the group, comprising Soros Real Estate Partners, Delancey Estates and US fund Fortress Investments, had just been picked as the winning bidder to own and manage banking giant Abbey National's property portfolio in the first ever private sector property outsourcing deal. The agreement between Abbey National and Mapeley will see the ownership of more than 557,400 sq m (6m sq ft) of property switch hands.
The deal is structured as a sale-and-leaseback of Abbey National's entire estate, which includes a leasehold portfolio and �460m of freehold property. The deal has been structured to give Abbey National increased operational flexibility so it can respond to changes in its business plan quickly without the restraints imposed by the UK's rigid long leasehold structure.
For Mapeley the deal arrives hot on the heels of winning STEPS, a �2bn government contract to manage and maintain the Inland Revenue and Customs & Excise property portfolio, which was decided at the start of August.
Mapeley's rapid growth has prompted speculation that it might be preparing for a flotation. But chief executive Robin Priest said the company had no plans to float in the short term. 'We're having too much fun at the minute,' he explained.
The Abbey National sale-and-leaseback deal is a much simpler landlord/tenant structure than STEPS, which has put Mapeley in charge of maintenance, cleaning and waste management of 723 buildings.
Mapeley outbid a partnership formed between Morgan Stanley's Real Estate Fund and property company London & Regional to clinch the deal. Abbey National has not revealed how much Mapeley has bid, but the STEPS was said to have been very competitive. Abbey National said that it selected Mapeley, ahead of its rivals, which numbered at least six bidders in the initial stages, on a combination of management strength and bid value, and the ability to offer sufficient flexibility.
The attraction for Mapeley will be the ownership of such a large portfolio backed by a strong covenant, which provides opportunities to securitise the rental income. In addition, documents sent out to bidders in April suggested that Abbey may vacate some of the portfolio in eight phases over the next 20 years, giving the consortium scope to covert the properties to other uses.
The consortium has had a staggering success rate so far, winning two high-profile outsourcing bids in quick succession. It is now bidding to win the contract to own and manage the BBC's �500m property portfolio with British Land. But Mapeley will need to wait until next February before its finds out if it has completed a hat trick of deals.

Ernst & Young, Nelson Bakewell and Lovells advised Abbey National.

PROPERTY WEEK 08/09/2000 P13



UK: MAPELEY WINS STRUGGLE FOR ABBEY NATIONAL'S PORTFOLIO. By Jenny Davey. Soros consortium wins outsourcing contract for sale-and-leaseback of more than 6m sq ft of bank's estate. Mapeley, the George Soros-led outsourcing consortium, has won its second giant property outsourcing contract in less than a month. As Property Week went to press, the group, comprising Soros Real Estate Partners, Delancey Estates and US fund Fortress Investments, had just been picked as the winning bidder to own and manage banking giant Abbey National's property portfolio in the first ever private sector property outsourcing deal. The agreement between Abbey National and Mapeley will see the ownership of more than 557,400 sq m (6m sq ft) of property switch hands. The deal is structured as a sale-and-leaseback of Abbey National's entire estate, which includes a leasehold portfolio and �460m of freehold property. The deal has been structured to give Abbey National increased operational flexibility so it can respond to changes in its business plan quickly without the restraints imposed by the UK's rigid long leasehold structure. For Mapeley the deal arrives hot on the heels of winning STEPS, a �2bn government contract to manage and maintain the Inland Revenue and Customs & Excise property portfolio, which was decided at the start of August. Mapeley's rapid growth has prompted speculation that it might be preparing for a flotation. But chief executive Robin Priest said the company had no plans to float in the short term. 'We're having too much fun at the minute,' he explained. The Abbey National sale-and-leaseback deal is a much simpler landlord/tenant structure than STEPS, which has put Mapeley in charge of maintenance, cleaning and waste management of 723 buildings. Mapeley outbid a partnership formed between Morgan Stanley's Real Estate Fund and property company London & Regional to clinch the deal. Abbey National has not revealed how much Mapeley has bid, but the STEPS was said to have been very competitive. Abbey National said that it selected Mapeley, ahead of its rivals, which numbered at least six bidders in the initial stages, on a combination of management strength and bid value, and the ability to offer sufficient flexibility. The attraction for Mapeley will be the ownership of such a large portfolio backed by a strong covenant, which provides opportunities to securitise the rental income. In addition, documents sent out to bidders in April suggested that Abbey may vacate some of the portfolio in eight phases over the next 20 years, giving the consortium scope to covert the properties to other uses. The consortium has had a staggering success rate so far, winning two high-profile outsourcing bids in quick succession. It is now bidding to win the contract to own and manage the BBC's �500m property portfolio with British Land. But Mapeley will need to wait until next February before its finds out if it has completed a hat trick of deals. Ernst & Young, Nelson Bakewell and Lovells advised Abbey National. PROPERTY WEEK 08/09/2000 P13