Sol Zakay's Deal of the Decade
Amongst the many billions of pounds in deals Sol Zakay has been involved in was a landmark deal with M&S. In 2001, Sol Zakay secured what was described by property week as the ‘deal of the decade’, a £348M sale and leaseback agreement to purchase 76 Marks and Spencer stores in what was seen as a very competitive process.
Having purchased the stores, the leaseback part of the deal was structured to offer maximum operational flexibility to M&S, with initial lease terms going to March 2027. It also included fixed annual rent increases of between 1.5% and 1.9%, doing away with traditional 5-year rental reviews.
For M&S, this deal represented stage one of a plan to return up to £2 Billion to shareholders.
In 2016, Sol decided to put their Marks and Spencer portfolio up for sale, valuing the 76 stores, including 13 in London, at £450M, generating a near 30% return on his original outlay even before annual rental profits are taken into consideration, which was estimated to be £24.6M annually, built into the original leaseback deal.
However you look at it, this has to be seen as one of the most successful property deals of not just the decade but probably the last 50 years.
The portfolio was eventually purchased by Fortress, the owner of Majestic Wines, which is believed to have included a little non M&S income. The Leicestershire-based Marlborough Property Co was confirmed as doing a sub-sale with Fortress for £122.5M for the purchase of the core London M&S portfolio.
Fortress put 17 of the remaining stores up for sale in 2022 for £70M.