LONDON - Annington Funding PLC has confirmed the sale of its Married Quarters Estate (MQE) assets to the UK Ministry of Defence (MOD) in a deal involving around 36,000 properties across England and Wales. The transaction, which saw contracts exchanged on Monday, is set to close on January 9, 2025.
Under the terms of the sale, Annington will relinquish its 999-year lease on the MQE units to the MOD, with the exception of certain units specified below. The MOD will pay Annington £5.9945 billion upon the deal's closure. Additionally, the MOD will continue to pay rent on the MQE until the transaction is finalized, which is expected to be between £10.3 million and £10.5 million, including the rent for the quarter in advance at closing.
The MOD has also agreed to surrender its leasehold interest in 159 units to Annington within approximately four months of the transaction's closing date. These units had previously been identified to Annington, and notices to terminate the leases were served by the MOD prior to the exchange of contracts. Following the closing, Annington will acquire the freehold of these properties.
Moreover, the MOD will transfer additional property valued at £55 million to Annington after the closing. The specific properties will be identified within 12 months of the closing date, with Annington set to acquire the freehold post-identification.
Post-sale, Annington and the MOD will collaborate to separate the units returned to Annington that currently utilize utilities supplied by the MOD. This process is expected to be completed within three years from the date of exchange, with a potential extension of up to five years.
The agreement also stipulates the termination of all other contractual arrangements between Annington and the MOD concerning the MQE. Furthermore, it includes the settlement of all actual or potential claims between the two parties, except for leases where handbacks have been completed or initiated. This settlement encompasses the resolution of ongoing legal proceedings regarding the MOD's attempts to enfranchise the MQE.
Following the sale, Annington will maintain a portfolio of non-MQE assets and continue its operations as a property investment company, focusing on long-term investments in UK residential real estate assets.
This transaction is detailed in a press release statement by Annington Funding PLC, with the company's Chief Financial Officer, Stephen Leung, providing the announcement.
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