Deutsche Bank backs Galliard to build out London homes

Loan to support £1bn pipeline

Deutsche Bank has provided a £75m loan to Galliard Homes, to support the housebuilder’s new joint venture with Guggenheim Partners-backed Cain Hoy Enterprises.

Deutsche Bank croppedThe three-year loan will be used for a programme of London residential projects that will have a combined gross development value of £1bn.

Galliard’s 50:50 joint venture with Cain Hoy, known as Galliard Developments, will see them contribute a combined £225m. The security for the Deutsche Bank loan will be Galliard’s share of the equity funding.

The first project to be funded will be 2 Millharbour, a joint venture with Frogmore near Canary Wharf. Contracts have already been exchanged for the purchase of the site which has the potential for up to 900 luxury apartments.

Stephen Conway, chairman & chief executive of Galliard Homes said: “The market in and around London remains robust and is underpinned by a shortage of properties, strong economy and international desirability. This significant investment will enable Galliard to expand our pipeline of new developments over the next three years in a focused and opportunistic manner, building on the success of its schemes to date.”

New venture Cain Hoy has been highly active in the London residential and development markets through both equity investments and lending in the past few months.

Headed by former Heron International deputy chief executive Jonathan Goldstein, the company was launched in September by previous Guggenheim employees.

He said: “Galliard’s proven ability to deliver popular, high quality, profitable developments, particularly as part of regeneration projects, makes it an attractive target for investment and a valuable joint-venture partner. Our property investment expertise and financial firepower, combined with their strong development team, put us in a strong position to deliver solid returns.”

Last month Real Estate Capital revealed that Cain Hoy was lending Almacantar around £370m to finance its £550m purchase of the office element of the Shell Centre on London’s South Bank.

In September Cain Hoy bought Islington Square, a 4.5 acre mixed-use project in north London that will include a 500,000 sq ft shopping centre and a new residential scheme alongside Sager Group. Earlier in the summer it issued a £130m loan to Delancey and Infinity SDC for the redevelopment of the 1.2m sq ft Press and Broadcast Centres for the 2012 Olympic Games in Stratford, east London.