BNP Paribas has teamed up with an Asian mezzanine lender to provide more than £300 million (€339 million) of debt to refinance the London Hilton on Park Lane, Real Estate Capital understands.
London & Regional has secured the financing, with a maturity of between five and seven years. Two years ago, the UK-based property firm submitted a planning application for an extensive refurbishment of the hotel, to include new luxury residential flats.
The plans, approved in September 2016, involved the creation of 28 flats at the top of the building, offering views over Hyde Park and Buckingham Palace, which were reportedly expected to sell for around £7 million each.
Completed in 1963, the Park Lane hotel was the first Hilton in the UK. London & Regional added the asset to its more than £9 billion property portfolio in 2001, when the firm acquired the hotel from property company Land Securities for £157 million.
The London Hilton refinancing comes at a time when UK real estate investment and lending activity remains resilient, despite the country’s decision to leave the European Union. The upturn in UK investment volumes, up last year by 11.6 percent to €72 billion on 2016, according to CBRE, has been mainly driven by London’s appeal to Asian investors, who are benefiting from the cheaper pound and less competition from other buyers.
Asian investors also have more appetite for European property debt, as illustrated by a survey of delegates attending ANREV’s Korea conference in early February. According to the poll, more than 50 percent of the attendees wanted to increase their real estate investments in Europe, with a majority favouring value-add and debt investments.