M7 Real Estate has sourced a £76.5 million senior loan from Barclays Bank to finance its purchase of a mixed-use UK property portfolio from Goldman Sachs, Real Estate Capital can reveal.
The five-year loan finances the acquisition of the Omega portfolio, which M7 has bought for around £128 million. The industrial, office and retail portfolio was bought on behalf of the M7 Real Estate Investment Partners V (REIP V) fund.
The 60 percent loan-to-value facility is understood to have been competitively priced at an all-in rate of less than 3 percent.
The deal is the first significant asset-based financing agreed between Barclays and M7, although the UK bank has lent to the pan-European investor at the corporate level since its inception in 2009.
The Omega portfolio comprises 26 UK properties, which total around 1.6 million square feet of space. It is 81 percent let to 149 tenants including government bodies, Lloyds Bank and B&Q. The weighted average unexpired lease term is 4.33 years.
The portfolio has been acquired with a rental income of £11.2 million per year. M7 intends to asset manage the properties and will aim to develop additional units where possible.
Commenting on the closing of the acquisition, M7 chief executive Richard Croft said: “The Omega portfolio is a significant acquisition for M7 as it represents our continued confidence in the UK market, following our recent investment in the regions through our REIP III and REIP IV mandates. Producing a good level of quality income, they offer us opportunities to increase capital and rental values through our asset management expertise.”