Deutsche backs London scheme with short-term loan – Exclusive

Deutsche Bank has provided a £66 million (€72 million) loan to real estate fund manager Aerium to finance the ongoing redevelopment of a central London office and residential scheme.

The one-year loan, which can be extended, will repay existing debt held against Herbal House, a former newspaper printworks based in the Clerkenwell district of the UK capital, and will fund the remainder of its conversion into new offices and residential space. It will also cover the project until it is fully let.

Aerium bought Herbal House in 2012 for a reported £26 million and subsequently won consent, alongside development partner Allied London, to transform the building into 100,000 square feet of flexible office workspace, plus a residential component. The scheme is due to complete later this year.

Deutsche Bank is understood to have been selected to finance the project due in part to its existing relationship with Aerium. The loan will reflect a 50 percent loan-to-value ratio of the completed scheme.

Herbal House dates to 1928 when it served as the printing facility for the UK’s Daily Mirror newspaper. At the time of its purchase by Aerium, it was leased to the University of the Arts. The Clerkenwell area, located to the north west of the City of London, has become popular with digital and creative businesses in recent years.

In May, Aerium sourced finance from Deutsche Bank Group Subsidiary Deutsche Asset Management, as part of a refinancing of a property in London’s Mayfair area. In total, Aerium sourced £69 million, including £44 million of senior debt, from Germany’s pbb Deutsche Pfandbriefbank and £25 million of mezzanine debt from Deutsche AM, provided through its mandate from German pension fund BVK. The loan refinanced a mixed-use asset at 49/51 Conduit St & 24 Savile Row.