ING Real Estate Finance and LBBW have jointly underwritten a £400 million refinancing of the City of London’s Salesforce Tower, the building formerly known as the Heron Tower.
The banks have provided the five-year senior facility on a 50/50 basis. The loan is understood to reflect a loan-to-value ratio of slightly below 60 percent and it will amortise to £370 million during the term.
The two banks are in the process of syndicating the loan, although they are expected to retain around £200 million between them.
The 46-storey office tower, located at 110 Bishopsgate, is owned by a consortium of investors including Gerald Ronson’s Heron International, which also acts as the asset manager of the building. Other members of the consortium are reported to be the State General Reserve of Oman and members of the Saudi royal family. The loan has been provided to a Jersey-registered entity.
The Salesforce Tower was developed between 2008 and 2011, during the market downturn. However, it is now fully let, with software company Salesforce.com occupying ten floors and the remainder multi-let.
The development of the tower was initially financed with a £370 million development loan provided by a consortium of banks including Eurohypo, now Wells Fargo back in 2008. In October 2013, Starwood Capital agreed a £288 million financing of the completed asset, with additional equity also provided by the owners. The ING and LBBW loan has repaid Starwood’s facility.
In September 2015, CoStar News reported that Chinese insurer Anbang had dropped a £750 million purchase of the Salesforce Tower, which was still known as the Heron Tower at the time. The deal had initially been agreed in June 2015, CoStar said, but fears about weaker growth in the Chinese economy prompted Anbang to discontinue the deal.
“We are delighted to have co-arranged and jointly underwritten this refinancing of a best-in-class London office asset. We look forward to continuing our relationship with the consortium of investors and Heron International who are highly regarded players in the real estate market with a strong track record,” said Thorsten Schönenberger, member of the executive management board and global head of real estate at LBBW.
“We are very pleased to have the opportunity to finance such a high quality asset that has attracted a solid tenant roster,” added Mike Shields, head of REF Western Europe, UK, USA, and structured products at ING.