QinetiQ secures TCP investment in Cody Technology Park
Above: Steve Wadey, Group Chief Executive Officer of QinetiQ.
Courtesy QinetiQ
QinetiQ occupies approximately a third of the space at CTP with the remaining two thirds occupied by 96 other tenants, vacant, or used as common areas. Prior to this transaction, QinetiQ was responsible for the investment and maintenance of the whole site.
Steve Wadey (above), Group Chief Executive Officer of QinetiQ, said: "I’m delighted we have found a strategic partner committed to investing in Cody Technology Park and developing its long-term future as a centre of excellence in defence, science and technology in Hampshire. The sale of the site to Tristan Capital Partners is aligned to our strategic priorities and underscores our commitment to focusing on our core business to deliver for our customers."
"We remain fully committed to Farnborough as the location of our Group headquarters and a major science and technology centre in the UK and will become the principal tenant on the site. This deal will result in the launch of a programme of investment by Tristan Capital Partners to further develop and modernise the technology park for all current and future tenants, whilst allowing us to invest in the development of the Company consistent with our enhanced focus on capital allocation."
Ali Otmar, Senior Partner and Head of Investments at Tristan Capital Partners, said: "This acquisition provides the Fund with the opportunity to deliver a strategic investment programme for Cody Technology Park. We believe the long-term occupation and anchorage of QinetiQ, combined with our strategic vision and investment programme, will reinforce Cody as the premier research and development campus for the aerospace and defence industries across the UK and Continental Europe."
"The business plan involves substantial capital expenditure investment to improve the common areas, tenant accommodation and the overall tenant experience for QinetiQ and the 96 other tenants in the park. The aim is to create a vibrant, forward-looking environment that meets the evolving needs of businesses, and supports and grows the local economy."
Upon completion of the deal, which is expected within eight weeks, a cash receipt of £112 million will be received and QinetiQ will enter into a 15 year lease with TCP for its existing footprint. As a result of this transaction, net debt is expected to improve by approximately £65m with a negligible reduction in underlying operating profit and operating cash flow due to the loss of tenant income.
Under IFRS 16 and right of use asset accounting, a one-off, non-cash, accounting loss of approximately £30m is expected to be recognised as a specific adjusting item at completion. This will be calculated based on the varying values of assets being sold and those being leased back.
