Deutsche Hypo has provided £53 million of initial finance to Ashby Capital, secured on a Swansea retail asset.
The loan for Morfa Retail Park, at a loan-to-value ratio of 60 percent, follows Ashby’s cash acquisition of the shopping park in December.
Deutsche Hypo’s facility includes a capex element to fund work at the scheme, including expansion of one of the units to create a 60,000 sq ft fashion and home store for Next. The bank has agreed future add-on tranches to finance further improvements.
The margin is believed to be about 160-170 basis points, and the loan is for a five-year term.
Walter Love, senior director in Deutsche Hypo’s London branch, said the asset showed “good upside potential through active management that we are confident Ashby Capital will be able to achieve.”
Ashby, set up two and a half years ago by Peter Ferrari and owned by Middle-Eastern capital, is working on Morfa with Quadrant Estates, the UK asset management company specialising in central London and retail assets owned by Tristram Gethin and Christopher Daniel. Ashby and Quadrant are looking for more, similar opportunities together – dominant retail parks with flexible planning.
Quadrant also advises KKR on four retail warehouse parks which the private equity firm has bought in the UK over the last two years, in Glasgow, Oxford and Sunderland – the Tuscany portfolio – and in Wednesbury in the West Midlands.
The park in Oxford was sold last month, to Pramerica acting on behalf of Prudential Insurance of America at a sub 5 percent yield.
Ashby financed the acquisition of Colmore Plaza, a large office building in Birmingham, with debt fund AgFE last year and its first asset, 200 Aldersgate in the City of London, with AXA in a loan arranged by Société Générale.