Helaba has financed the first phase of Tristan Capital Partners’ Embankment Greengate office development in Salford, Greater Manchester. It has provided a £30m development loan at an all in cost of between 4.5% and 5%.
The construction facility is for a term of two years, after which it will turn into a three-year investment facility. It finances 65% of the phase one build costs.
Phase one will see a 200,000 sq ft, eight-floor office built on top of a 442 space car park, which has been pre-let to Q-Park. Salford council has committed to taking an eight-year lease on the office space which features a surrender agreement – this means it will give up the space when a local tenant is found to occupy it.
“Salford council will never occupy the space it has taken a lease on, but this will enable it to get built. The project is a key landmark for the regeneration of the rest of Salford,” explained Peter Mather, Tristan Capital Partners’ managing director of investments for UK and Europe.
The redevelopment of the former Manchester Exchange railway station situated in the City’s ‘Greengate’ quarter includes planning permission for a second, 150,000 sq ft office building.
Equity of £25m has been injected by Tristan (75%) and joint venture partners Ask Real Estate and main contractor Carillion (25%).
Tristan is investing in the scheme through its European Property Investors Special Opportunities 3 fund, for which it is also in talks to secure senior financing of up to £100m for its recent £153.15m Project Tree purchase – a portfolio of 144 retail properties across England and Wales that it bought out of receivership.
In Salford, law firm Norton Rose Fulbright advised the joint venture. The negotiations included an agreement with landowner Network Rail for the drawdown of a long lease for the first phase.