Venator Real Estate Capital Partners’ USD1bn Trophy Property Development Fund has entered into an asset swap agreement with Shui On Land.
Under the agreement, the fund will become majority owner of a large residential project in Shanghai in exchange for its minority investments in four developments in other key regions in China. The transaction is expected to close in the fourth quarter of 2014 subject to closing conditions.
“Entering into this agreement with Shui On Land marks a significant step forward in the advancement of the fund,” says Philip Mintz, who steered the fund’s management committee that led the negotiations. “Lot 116 is a prime quality asset with an expected completion schedule that fits well with our investment strategy and one that will allow our investors to realise maximum possible value.”
The restructuring follows a recent change in fund management that saw Venator Real Estate Capital Partners appointed as the new fund manager. Venator is led by president Philip Mintz, the former Asia head at Warburg Pincus, and chairman Mehmet Dalman, the former chairman of London-listed miner Eurasian Natural Resources Corporation.
“With the asset swap moving toward completion and the strong backing of our investors and support of our partners, the Fund is better positioned today to maximize value for investors,” says Mintz.
Upon close of the transaction, the fund will own a majority stake in a 968,000-square-foot residential project in the fashionable Xintiandi district of Shanghai named Taipingqiao 116 (“Lot 116”) in exchange for its minority investments in four developments in Shanghai, Wuhan and Chongqing.
Simultaneous with the asset swap, the fund and Shui On Land entered into a joint venture agreement under which Shui On Land will retain a minority stake in Lot 116 and remain the developer of the property after the close of the asset swap.
The limited partners of the fund and the board of directors of Shui On Land have approved the asset swap and the joint venture agreement.