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Tycoons plan Shell forecourt sell-off

THE TIMES: Tycoons plan Shell forecourt sell-off

6 June 2005

By Jenny Davey

A PARTNERSHIP of millionaire brothers is poised to put 180 UK Shell petrol stations up for sale, with an expected value of more than £400 million, The Times has learnt.

Robert and Vincent Tchenguiz, the Iranian property tycoons, and Ian and Richard Livingstone, the secretive property investors, bought the service stations five years ago from Shell through Octane, a joint venture vehicle, for about £300 million.

Under the terms of the original deal, Shell agreed a sale and leaseback to carry on operating the service stations. At that time oil companies were under pressure from the City to sell retailing and property assets and reinvest the proceeds in their core business activities.

The service stations are scattered across the UK in town centres or on trunk routes. The sale comes at a time of record demand for commercial property assets. It is thought that the petrol stations will appeal to international investors as well as UK buyers. The huge wall of money seeking to buy property has pushed up values and crunched rental yields to a 20-year low.

The Shell portfolio, which will be marketed by CB Richard Ellis, the commercial property consultant, is expected to offer investors a rental yield of about 5 per cent.

The deal comes as both sets of property brothers have been involved in frenetic dealing activity. The Livingstones and the Tchenguiz brothers are usually competing against each other for deals, rather than working in partnership.

Ian and Richard Livingstone, who feature in 192nd place in The Sunday Times Rich List, with an estimated £250 million personal fortune, recently bought Michael House, the former Marks & Spencer headquarters in Baker Street, Central London.

London & Regional, their private property company, has also teamed up with Nomura, the Japanese bank, to try to bid for Somerfield, Britain’s fifth-biggest supermarket chain.

Meanwhile, Robert Tchenguiz is involved in a rival bid for Somerfield, in partnership with Baugur, the Icelandic retailer, Apax Partners and Barclays Capital.

Mr Tchenguiz has been busy accumulating a large pub portfolio through the acquisition of Yates Group and a deal to buy a £345 million portfolio of pubs from Spirit Group.

His brother Vincent recently bought a stake in Chesterton, the estate agent, and has also been bidding on flagship commercial properties across London, including the ABN Amro headquarters in Bishopsgate.

News of the petrol station sale comes as bidders are expected to submit confirmed offers this week for a £300 million-plus sale and leaseback of Boots the Chemist stores.

Four parties have been short-listed for the deal. Reit Asset Management, the property group that owns St Katharine Docks near the Tower of London, is thought to be among the leading contenders.

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