Development Securities finances London and Dublin assets

Development Securities has put in place two new financings totalling £76.2m, with Allied Irish Bank and Royal Bank of Scotland.

RBS has provided a £57m, five year-loan for the UK property company’s purchase of Becket House on Lambeth Road in Southwark, London. The loan-to-value is 65.5% based on a purchase price of £87m. The 12-storey building is fully let with an average unexpired lease term of 12.5 years.

Marcus Shepherd, finance director, Development Securities said: “We have completed a large number of deals over the past few years and have benefitted from our long-term relationship with RBS. This latest facility has enabled us to complete a significant transaction in a very tight timescale that offers us a core income stream in the medium-term with some development optionality over the longer term. This proves the benefit of long term relationship banking”

Paul Eyre, regional managing director, real estate finance, at RBS added: “It was important to our clients that we provided credit approved terms in 10 days and were then able to fully document the facility ahead of exchange a few weeks later, which we were able to achieve. We provided c.£3bn of facilities to our clients, both existing and new, over the first half of 2014 and are enjoying a strong H2 as the economy continues to strengthen”.

As reported by Real Estate Capital on Monday, RBS has completed an internal reorganisation of its real estate finance teams and is targeting new lending of £5bn-£6bn each year.  The small and medium-sized enterprises property unit, which made loans under £25m and was led by Andy Hallett, has been merged with the corporate team. Hallett has taken on a new role as managing director and head of real estate for London and the south east.

Allied Irish has funded the company’s €36m purchase of a nine-acre residential development site and 85 residential units in Malahide, north Dublin. The €24.3m loan reflects a 67.5% loan-to-value. Development Securities plans to build a further 300 homes on the site. Known as Robswall the development was formerly owned by Gerry Gannon before being taken control of by NAMA.

Development Securities reported in its annual results today that as at 31 August its net debt was £150.7m, representing gearing of 44.9%. This compared to a figure of £153.8m and a gearing level of 48% on 28 February.