Mountgrange and Patron buy Mercury portfolio in the UK

Mountgrange Real Estate Opportunity Fund and Patron Capital have teamed up to acquire the remaining assets held by Henderson Global Investor's CMBS Caspar fund in the largest UK multi-sector portfolio sale of the last three years.

The so-called Mercury portfolio comprised 24 retail, office and industrial sectors assets and was purchased by the joint venture for £184 mln (EUR 229 mln). Some 60% of the assets are in London and the south east and the remaining across the UK.

The 50/50 joint venture, which includes new debt finance from Santander, plans to drive value and increase the income yield through active asset management and a capital expenditure and refurbishment programme.

The joint venture quickly flipped seven of the properties to CBRE Global Investors for EUR 80 mln, one to Royal London and one to F&C REIT.

Mountgrange Real Estate Opportunity Fund has to date committed £233 mln in 13 transactions across the UK. Private equity firm Patron has EUR 2.4 bn of capital under management. It took part in this transaction via its latest vehicle, Patron Capital IV.

Henderson said in a statement that the Caspar CMBS had gone past its loan maturity date and had Henderson not secured this sale the fund would have been 'at the mercy of its creditors'.

Martin Payne, Caspar fund manager said, 'It has been a tense and challenging process between managing the debt expiry at the same time as trying to conclude a very complex disposal transaction. We are delighted to have concluded a satisfactory outcome which means we are able to return equity to investors from a fund whose LTV had gone well above 100%. The key to that is in identifying the right purchasers and working together to find solutions.'

John Rodgers, head of UK business space investment at Drivers Jonas Deloitte, added: 'The portfolio sale marks the end of a long journey for the Caspar fund, which began as a fund recapitalisation and ultimately ended as a complete exit of all the assets in the vehicle.'

Drivers Jonas Deloitte was the property investment adviser to Henderson, with K&L Gates providing legal and corporate advice.

Click on the link below to read: 'JV flips seven Mercury properties to CBRE GI for EUR 80m'