Ares, Delancey-owned Minerva in £575m UK sale

The London-based developer taken private by property fund managers Ares and Delancey has exited one of its prominent UK investments to Taiwan-based insurer Cathay Life.

Minerva, the property developer taken private by real estate fund managers Ares Management and Delancey in 2011, has sold The Walbrook Building, a City of London office and retail asset, to Taiwan-based insurer Cathay Life. The headline price was £575 million (€805 million; $905 million), before certain adjustments including for unexpired rent-free periods.

The Walbrook Building features a highly distinctive contemporary curved façade, designed by architects Foster & Partners, and provides 440,000 square feet of state-of-the-art office space and retail space. When Minerva was acquired in 2011 the Walbrook Building was 100 percent vacant but is today home to office tenants, including Worldpay, Arthur J. Gallagher & Co, Xchanging, and Vanguard. Virgin Active and Waitrose have recently signed long-term leases in the retail portion of the building.

Minerva’s sale of The Walbrook Building is the developer’s fourth since 2011. The most recent was the sale of the Ram Brewery to Greenland Group in January 2014. The transaction had a total investment size of £600 million, which included the purchase price and development costs.

The acquisition by Cathay Life was its second in London after its purchase of Woolgate Exchange for £320 million last July. The investor is part of a growing line of Taiwanese insurers who are acquiring assets overseas after domestic regulatory hurdles were removed in 2013.

According to CBRE, the global property services firm, Taiwanese insurers are a significant part of a wider deregulation trend happening among Asian insurers that could result in approximately $75 billion of equity being allocated to real estate by 2018. CBRE predicted other Taiwanese insurance companies would also be among the most active overseas real estate investors as there are few institutional grade properties in the their home market.

Taiwanese insurer Fubon Life Insurance Company’s, acquisition of tourist hotspot Madame Tussauds waxwork museum for more than £320 million last week is another example of this trend.