Executive Summary
Minerva is a property investment and development company whose principal strategy is to create shareholder wealth through investment in commercial property in London; it has recently moved into super-prime residential property development. The policy is to invest in assets with strong cash flow, rental growth potential and where the opportunity exists to add significant value through active and entrepreneurial management. A central part of this strategy is the maintenance of a broad based financial framework which is able to evolve alongside the changing profile of the Group. The Group's investment portfolio is underpinned by long term income from good quality tenants. The Group owns three strategic development schemes, each of which has been approved. Two of these developments are located in London's financial centre, The City of London - The Minerva Building and The Walbrook. The third development, Park Place, will be one of the United Kingdom's largest shopping centres, located in Croydon, Greater London.
Company History
The company went public in 1996. Together with other shareholders, it acquired failing department stores Allders in 2003, bringing the Croydon site into the portfolio. An abortive offer was made for the company in May 2008, but the bidder could not get the required third party consents to proceed.
Current Events
Minerva is currently renegotiating its debt with its bankers.
Business Model
Minerva develops properties, focused on prime properties in the commercial, retail and (most recently) high-end residential sectors within London. It holds most of these properties as long term investments. However, over the past three years, it has been selling investment properties in order to reduce borrowings. This has had the result of reducing rental income from its portfolio.
Minerva generally looks for large projects (£ 25m plus acquisition value) that have a 3-5 year turnaround. Finance is sourced separately for each scheme. The company believes that the right mix of structured finance can improve returns to shareholders. It also looks for projects where it can enhance the value of a site through gaining or altering planning permissions.
Current developments include:
The Walbrook - a prime freehold site in the centre of the City. 445,000 square feet of office and retail space. Construction has begun, with scheduled completion at the end of 2009.
St Botolph's - a 1.25 acre site, on the east side of the City. 560,000 square feet, including retail and office space. An earlier…
