AREA Property Partners and Delancey Real Estate Asset Management revealed today their two secret partners in the deal to take private the former UK-listed property and investment company, Minerva.
The other two parties to the deal are US firm Franklin Templeton Real Asset Advisors, and Zug, Switzerland-based Partners Group.
AREA said it was buying Minerva through its European Real Estate Fund III, which closed in January 2008 with total commitments of $1.4 billion, whereas the other firms did not reveal which funds they were making the investment on behalf of.
The announcement today said the completion of the deal to take over Minerva happened on 19 August. The participation of Franklin Templeton Real Asset Advisors and Partners Group was not previously publicly stated, however.
The largest assets of Minerva are two newly-completed Class A office buildings in the City of London, the Walbrook and St Botolphs buildings, and a high-end residential development in Central London called the Lancasters. Minerva also owns three development sites in or around London including the Odeon Kensington, a residential development site on London’s Kensington High Street, and the Ram Brewery, a seven acre development site in the heart of the London Borough of Wandsworth.
The partners took over Minerva for £200 million (€228 million; $324 million) in equity and assumed £800 million of debt. Experts said it would constitute the first UK real estate privatisation since The Carlyle Group took over factory outlet developer Freeport in 2007.
Minerva is a small-cap property company, but the key to the interest, according to JPMorgan analyst Harm Meijer, is that it owns a spread of prime London property. “It has quality property in London and a mix of residential, offices and retail,” he said. “If you can combine that with some market knowledge, experience or a local management team that has access to tenants, it can go quite quickly in terms of valuation.”