Deutsche Bank and HSBC extend £500m for Intu’s Merry Hill acquisition

UK regional mall owner Intu Properties has arranged a new bridging loan with its existing lenders for its £410 million acquisition of the remaining 50 percent of Merry Hill that it did not already own.

Deutsche Bank and HSBC, which provided a previous £191 million loan for intu’s original 50 percent stake, have increased their exposure in a new £500 million loan.

The new loan matures in early 2018 and was written at an all-in cost of about 3 percent. Cushman & Wakefield valued the whole Merry Hill estate, which includes two retail parks, office and leisure as well as a 1.4 million square foot regional shopping centre, at £889 million. It is situated in the West Midlands, in Dudley, 10 miles from Birmingham.

As a consequence, intu’s pro forma loan to value increases from 41 percent to 43 percent.

Intu has a CMBS platform which it has used to finance some of its other 100 percent-owned large assets and refinancing Merry Hill through this vehicle could be a future option for the UK REIT.

The company bought the latest 50 per cent Merry Hill stake from Australia’s Queensland Investment Corporation.

David Fischel, intu’s chief executive, said: “We are pleased to have been able to acquire the remaining 50 per cent interest in intu Merry Hill, some two years after our original 50 per cent acquisition in 2014.

Our ownership and asset management to date has provided us with ample evidence of the centre’s upside potential, whatever the outcome of the EU referendum.”