Delancey, the London-based private equity real estate firm, has stepped into the battle to buy an industrial UK property portfolio out of receivership.
According to reports from the UK property press, the firm – which raised €1.5 billion in 2007 – has teamed up with Citi, which provided mezzanine finance to the original owner of the Industrious portfolio that went into the hands of receiver Ernst & Young this year.
Citi is trying to activate a pre-emption right in its lending agreement to match a bid for the properties in the event of receivership.
Delancey and Citi are up against rival Max Property Group, another London-based firm which raised £220 million in June in an IPO and is backed by US firm, Och-Ziff Capital Management Group. The company has already exchanged contracts, but Ernst & Young threw the deal into doubt earlier this month by saying certain conditions hadn’t been met. The firm has reportedly bid around £232 million for the Industrious assets.
The properties were securitised in 2006 by Royal Bank of Scotland, reportedly leaving Class A noteholders unable to recoup full value and those below class A out of the money.