Blackstone Mortgage REIT lends to KKR in Spain

Blackstone’s US-listed mortgage trust has made its first loan in Spain, following its recent entry into Continental European property lending.

Blackstone Mortgage Trust has provided a €72m whole loan for US private equity firm Kohlberg Kravis Roberts’ (KKR) purchase of two Spanish retail assets from British Land: Nassica, a 95,000 m2 retail and leisure centre located in Madrid and Vista Alegre, a 16,000 m2 retail park in the small town of Zamora in northwest Spain.

The 70% loan-to-value financing is for a term of five years and replaces bank debt by pbb Deutsche Pfandbriefbank which refinanced both properties with a €61m loan in 2012.

Blackstone Mortgage Trust liked the sponsor and the good quality assets, with some asset management upside.

The REIT’s first loan in Continental Europe came earlier this month, through the origination of a €28m senior loan for Angelo, Gordon & Co. and its joint venture partner Valad Europe’s May purchase of the Equinox portfolio of nine Dutch office buildings predominantly in the Randstad area for €37m.

KKR’s circa €100m acquisition in the first quarter of this year marked its first investment in Spain. It is working with local retail partner Neinver, which developed Nassica and manages the adjacent outlet centre.

British Land announced in 2013 it was planning to sell its entire retail holdings in Continental Europe, which it had entered in 2005 through the purchase of retail specialist Pillar Property, with assets in Spain and Italy.