Lloyds Bank Commercial Banking has syndicated 50 percent of its recent loan to fund development at London’s O2 arena to Industrial and Commercial Bank of China (ICBC).
Lloyds has retained the other 50 percent stake in the £185 million facility.
The four-year whole loan was originated in January to a joint venture between Crosstree Real Estate Partners and Anschutz Entertainment Group. The facility will part-refinance the existing retail and leisure element of the arena complex and will also fund the development of a new 204,000 square foot designer outlet aimed at premium and high street retailers.
The new outlet is expected to be delivered in 2017 and will be the most significant addition to the O2 since the former Millennium Dome was converted into a concert venue in 2007. The O2 currently has 370,000 square feet of retail and leisure, which is fully-let to 24 restaurant brands and a cinema.
ICBC has joined Lloyds in a previous syndicated loan. Last July, the Chinese bank took a participation in the £277 million loan which Lloyds and Citi underwrote to finance MediaCityUK in Salford.
The O2 deal is further evidence that Asian banks are eager to buy into European commercial property financing deals. Last year, Bank of China took a €200 million participation in the €670 million loan ING and Natixis originated to finance the French, Belgian and Dutch Celsius portfolio. China Construction Bank also took a €50 million slice of the deal. Asian banks also participated in ING’s financings of London’s Gherkin and Christchurch Court office buildings and Lloyds is understood to have syndicated part of its loan backing the HSBC tower in Canary Wharf to Asian banks.
“We are pleased to have concluded the syndication of this landmark transaction to Industrial and Commercial Bank of China (London branch), which has been an active supporter of the UK real estate market in recent years,” said Paul Homewood, director in loan markets origination at Lloyds Bank Commercial Banking.
“The transaction underlines our unique proposition in the market, combining the strength of our balance sheet with the ability to syndicate debt to underwrite major investments into the UK economy,” added Homewood.
Andrew Day, head of commercial property at ICBC (London Branch), said: “The O2 is an icon of London and has grown to become one of the world’s leading venues. We are delighted to help finance the designer retail outlet at the O2 and this deal again demonstrates our continued commitment to the UK real estate market.”