Development Securities acquires MEN Arena

Development Securities, the property developer, has exchanged contracts to acquire the Manchester Evening News Arena, the largest indoor music and events venue in Europe.

The 21,000-capacity arena, which is located on an eight-acre site in Manchester city centre, is being sold for more than £60m ($90m) by a joint venture between GE Real Estate and Capital & Regional, the British property asset manager.

The deal follows months of talks about the property, which had also attracted the interest of other institutional investors such as Threadneedle and Legal & General. Development Securities is thought to be buying the arena in partnership with a US opportunity fund. The deal represents a yield of about 7.5 per cent.

The MEN Arena, which plays host to concerts by the world’s biggest pop acts –including Lady GaGa and Rod Stewart in the next month alone – was bought by GE and Capital & Regional for £61.8m in 2006 from Anschutz Entertainment Group.

The complex, which includes offices and retail units, was built in 1995.

Capital & Regional has been disposing of non-core assets over the past 18 months as part of a turnround of its business. The MEN Arena was one of a number of assets originally acquired to inject into one of its funds.

The deal marks the first major investment for Development Securities since it raised £100m in new equity from investors last year.

It has been focusing instead on smaller asset management and development deals.

● The first round of bids were expected on Tuesday for the large portfolio of properties backed by White Tower securitised debt, which have been the largest UK commercial mortgage- backed securities to default so far.

In a process that could raise up to £1bn, bids were expected on parts of the portfolio from a number of private equity groups, such as Morgan Stanley Real Estate Funds with Exemplar, the private developer, Area Property Partners with Helical Bar, and Catalyst Capital, as well as property companies such as Canary Wharf.