Asian investors swoop for UK property targets

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Five-a-side football pitch operator Powerleague has attracted Asian interest

Two or three Asian investors have expressed interest in Powerleague, a UK-based operator of football pitches that Patron Capital acquired for £42.5 million in 2009, according to Patron Capital managing director and senior partner Keith Breslauer. The firm is also in discussions with three groups of Asian investors, among other prospective bidders, interested in buying UK-based hostel operator Generator Hostels, he said.

The firm has not started a formal marketing process for either of the assets, which both have significant real estate holdings. Powerleague runs more than 460 football pitches across 49 sites in the UK, including a mix of owned and long-lease properties. Generator Hostels owns property in 11 European cities, including 60,000 square feet of freehold properties in London, according to Patron’s website.

Depreciation of sterling against the dollar – which fell from nearly $ 1.49 on June 23 to about $ 1.29 by July 6 but rebounded to nearly $ 1.34 as of July 15 – has created an incentive for Asian investors to invest in the UK market, Breslauer said. Theresa May’s appointment as Prime Minister has also boosted investor confidence, he added.

On July 12, AMC Entertainment Holdings, which is owned by Chinese group Dalian Wanda Group, announced it would acquire cinema chain Odeon & UCI Cinemas Group from buyout firm Terra Firma in a deal worth $ 1.2 billion.

Richard Hickman, director of investment and operations at HarbourVest Global Private Equity, said: “I picked up a mood of optimism among Asian investors [at a recent London Stock Exchange conference in Asia]. They saw this [Brexit] as an opportunity; they didn’t see it necessarily as anything to worry about in the long run.”

Asian acquirers have been busy investing in European companies since the start of 2016, buying 298 companies worth $ 102.3 billion in the run-up to the EU referendum, a 68% rise in value terms compared with the equivalent part of 2015, according to Dealogic.

Another of Patron Capital’s European assets, a Polish commercial real estate operating platform called Capital Park, has also attracted interest from Asian buyers, Breslauer said.

Meanwhile, in late 2015, Patron Capital, which announced on July 12 that it had raised €949 million for its fifth fund, sold Jupiter Hotels – which had a portfolio of 32 hotels – to a Thai joint venture comprising Singha Estate and a subsidiary of FICO Group.

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