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AEG, Crosstree seek £185m for O2 Arena retail

AEG and Crosstree Real Estate have appointed Eastdil Secured to find £185m to finance a designer outlet scheme at the O2 Arena in Greenwich, London. Debt brokers Eastdil has approached a number of lenders to secure the funding which could see up to 230,000 sq ft of retail space added to the events and leisure site.

Anschutz Entertainment Group (AEG) and Crosstree Real Estate have appointed Eastdil Secured to find £185m to finance a retail outlet scheme at the O2 Arena in Greenwich, London.

Debt adviser Eastdil is believed to have approached a number of lenders to secure the funding which could see up to 230,000 sq ft of retail space added to the events and leisure site.

The total value after development is estimated to be around £330m, including the existing income-generating leisure and retail at the venue , which is valued at £230m and will be security for the new loan.

About £75m of the £185m of finance has been earmarked as dedicated capital expenditure for the new development with the remainder secured against the venue’s existing restaurants and bars.

Inside the  O2 Arena, Greenwich
Inside the O2 Arena, Greenwich

Eastdil’s appointment is another score for the debt advisors. It has made rapid inroads into Europe’s property markets in the last 3-4 years and has quickly expanded its client base of borrowers on both refinancings and acquisition finance while also moving into investment sales.

The structure of the financing sought for the O2 Arena is typical of a traditional acquisition deal with a line of capex.

Land Securities was brought in last year to help deliver the scheme but its exclusivity agreement lapsed with AEG, the operator and long-leasehold owner of the O2 Arena, allowing Crosstree to buy a £100m stake in the venture.

AEG has been looking to develop a significant retail offering at the site, which contains a 20,000-seat live venue, since 2011. The US-founded sport and music presenter drew up plans then to develop an outlet village of around 110 shops located on the vacant ground and mezzanine floor space under the venue’s dome.

It secured planning permission for the development of additional retail in 2012.

 

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