Limitless eyes takeover of UK developer

LONDON CALLING: Limitless is looking at a takeover offer for Minerva. (Getty Images)

Dubai developer Limitless said on Thursday it was mulling a takeover offer for property developer Minerva, sending the UK firm's shares up by almost a quarter.

Limitless, part of state-owned conglomerate Dubai World, said in a statement it had not made a formal approach to Minerva's board and that it was in the "very preliminary stages of considering its options".

Shares in Minerva were up more than 23% at 124 pence by 1111 GMT as investors hoped to benefit from signs of emerging foreign investor interest in central London's battered real estate market.

"I was in the Middle East last week talking to a lot of investors in Dubai, Abu Dhabi, and Qatar and the location they all kept asking about was London," Tony Horrell, head of European capital markets at property services firm Jones Lang LaSalle, told newswire Reuters late on Wednesday.

"And the reason being because they regard it as a world city and when they think about the UK they think of London. So that money which is lowly geared is focused on the core end," he said.

Minerva owns two development schemes in London's City financial district and is building a major shopping centre in Croydon, on the southern tip of Greater London.

Commercial property prices in the UK have fallen sharply since the start of the global credit crunch compared with other real estate markets.

Valuations on average have been slashed by 16% since the summer and anecdotal evidence suggests asking prices could be up to 10% lower still.

The central London office market has been caught up in the selloff and the pressure has intensified in recent months as financial sector job cuts have dented rental growth prospects. (Reuters)

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