DekaBank has provided a £152 million (€170 million) five-year loan to finance the 1 & 2 Pancras Square office buildings at London’s King’s Cross.
The German bank acted as sole arranger and underwriter of the senior loan, which Real Estate Capital understands has a loan-to-value ratio of more than 50 percent.
The debt financing was provided to a subsidiary of the King’s Cross Central Limited Partnership (KCCLP), a joint venture between pension fund AustralianSuper and the British Telecom Pension Scheme. KCCLP’s investment in 1 & 2 Pancras Square is managed by UK property developer Argent.
The two prime office buildings, which provide more than 200,000 square feet of commercial space, are located at the southern gateway of King’s Cross Central, a 67-acre site which is being developed by Argent on behalf of KCCLP.
“Banks and lenders are generally competing much more aggressively now, as some of the largest deals have been financed by equity or by Asian lenders supporting Asian investors”
– Mark Titcomb
Asked about the risks of financing London offices amid the climate of political and economic uncertainty following the Brexit vote, Mark Titcomb, head of London representative office at DekaBank, said: “These assets are very prime and attractive in whatever political or economic environment we face. If you look at an occupier level, the buildings have a wide range of different tenants, which provides a much more secured cashflow.”
Titcomb declined to provide details on pricing, but he said the debt market in London is “becoming much more competitive again” on the back of a lack of opportunities.
“Banks and lenders are generally competing much more aggressively now, as some of the largest deals have been financed by equity or by Asian lenders supporting Asian investors,” Titcomb added.
In September, DekaBank joined forces with BNP Paribas to lead a €625 million financing of Hammerson and Allianz Real Estate’s Dundrum mall in Dublin. In July, the bank also co-underwrote a £488 million club deal to refinance the Merry Hill shopping centre for Intu, the UK regional mall owner.