Chelsfield and the Saudi Olayan Group have sourced debt from a club of four banks for their recent €1.2bn acquisition of one of the most significant portfolios to be sold in Paris for years.
ING led the club in a circa €750m financing of the pair’s purchase of the ultra prime Paris property portfolio, sold by listed Italian property company Risanamento. The sale to Chelsfield and its backer, Olayan, completed last month.
The Dutch lender, which coordinated the underwrite from its London office, is believed to have taken a €300m position of the circa €750m ticket. French banks BNP Paribas, Crédit Agricole CIB and Société Générale are thought to hold €150m each.
ING will look to sell down some of its exposure through the syndication market.
The terms are considered to be very competitive by lenders outside the deal, which did not get offered the mandate because it was put together based on existing relationships between the sponsor and the banks.
Chelsfield led the winning bid to acquire the nine mixed-use assets totalling 800,000 sq m which include include Valentino’s flagship at 17-19 Avenue Montaigne (pictured), Dolce & Gabbana’s in the same street and Sephora’s at 21-23 Boulevard Haussmann. Risanamento fell into the control of its banks post the financial crisis and sold the portfolio to pay down debt.
The buyers faced competition from Ponte Gadea, the property company of Amancio Ortego, Spanish co-founder of retailer Inditex; several US buyers; and from Luigi Zunino, Risanamento’s founder who had teamed up with Tom Barrack of Colony Capital to bid.
Zunino subsequently challenged the Risanamento board’s decision to sell to Chelsfield and Olayan. That failed but Chelsfield and Olayan agreed a call option for Zunino to buy one property, 17-19 Ave Montaigne, on condition he waives all further claims.
Clifford Chance advised Risanamento on the sale.
It is the second super-prime, retail-led, mixed-use portfolio in a top European city for Chelsfield and Olayan. In 2010 the pair swooped on a 3.5-acre island site in the heart of London’s Knightsbridge, buying it from Avestus, formerly Quinlan Private. They are drawing up plans for a 250,000 sq ft redevelopment scheme fronting Harvey Nichols department store, and the Mandarin Hotel for a block where the leases expire in 2016.