ING and LBBW have jointly arranged a £325m loan to refinance Sea Containers House on London’s South Bank, Real Estate Capital can reveal.
It is understood that the senior loan has a five-year term and reflects a loan-to-value of around 65%. No syndication of the debt is planned.
Competition amongst lenders to finance large, iconic London assets continues to be fierce, despite dramatic tightening of margins over the past 12-18 months.
Sea Containers House is located near Blackfriars Bridge. The building is owned by Archlane, a company asset managed by the Deerbrook Group. Deerbrook Group is headed by managing director JJ Ofer, who is part of the family which owns the shipping company Zodiac Maritime.
The building was recently comprehensively refurbished and comprises 290,000 sq ft of offices and a 359-bed hotel. Advertising firm Ogilvy & Mather has agreed to lease 226,343 sq ft of the offices at the scheme whilst the remainder has been let to sports brand Puma and shared office provider WeWork. The luxury Mondrian hotel is operated by Morgans Hotel Group.
Given that the hotel is newly opened, prospective lenders were asked to make positive assumptions about the performance of the hotel in respect to Deerbrook’s valuation. As a result some more conservative financiers were deterred.
The deal refinances a £120m loan put in place in 2011, also with ING alongside Berlin Hyp.
Michael Shields, ING’s head of real estate finance for western Europe, UK, USA and structured products, said: “We are very pleased to continue our financing of this London icon. We have always believed that this property’s transformation would be highly successful and we are proud to have supported the project from the very beginning.”
Thorsten Schönenberger, head of commercial real estate finance at LBBW, said: “LBBW is very pleased to have jointly arranged this prestigious large-ticket financing on a prime asset in a strong and exciting location benefitting from excellent quality sponsorship. This underlines LBBW’s commitment to the London commercial real estate market and its ability to provide large underwritings”.
For ING, the Sea Containers financing follows two other London office deals at the end of last year – the £365m financing of Joseph Safra’s £710m purchase of the Gherkin, 30 St Mary’s Axe and a £120m refinancing, jointly with Santander, of The Hounsditch Estate for TIAA Henderson Real Estate, both in the City of London
LBBW also completed a major City office funding in December, providing £105m of the £280m development facility put in place for Brookfield Office Properties’ Principal Place.