Oaktree Capital Management has chosen a financier to provide a whole loan for its £430m purchase of three regional UK business parks, Real Estate Capital can reveal.
Barclays is to provide a whole loan of around £344m, reflecting an 80% loan-to-value to the private equity firm. Oaktree had been seeking a five-year loan with a margin of below 150 basis points.
How the loan is ultimately split is still yet to be finalised but it is understood that Barclays is likely to syndicate 35% of the most junior element of the whole loan mezzanine tranche of around £120.4m and may also look to syndicate around half of the senior portion.
Barclays is understood to have faced strong competition from the likes of Bank of America Merrill Lynch, which is thought to have been considering a possible CMBS of the senior debt, and Citibank.
Yesterday Oaktree confirmed that it had exchanged contracts to buy the trio of assets alongside German asset manager and property company Patrizia from MEPC for a price that reflected a yield of 7.3%
The 4m sq ft portfolio includes Chineham Park in Basingstoke, Hampshire; Birchwood Park in Warrington, Cheshire; and Hillington Park in Glasgow. There are considerable development opportunities available throughout the portfolio but the initial facility is being used only to fund the initial purchase.
The deal is Oaktree and Patrizia’s second tie-up with Barclays. In August last year the duo bought IQ Winnershm a business park near Reading for £245m from Segro for which Barclays provided £175m of finance. A mezzanine tranche was subsequently sold to Europa Capital.
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