LBBW backs Aldgate office tower with £210m loan

German bank LBBW is to finance Brookfield and China Life’s acquisition of the Aldgate Tower office building on the eastern fringes of the City of London.

The bank is providing a five-year loan of around £210 million, reflecting a loan-to-value ratio of 60 percent on the purchase price, which was in the region of £350 million. The loan was priced below 300 basis points over three-month Libor, according to Estates Gazette, which first reported the financing.

Brookfield and China Life bought the 317,000 square foot tower from Irish firm Aldgate Investments earlier this year in a deal which reflected a yield of less than 5 percent. The multi-let building is understood to have a weighted average lease length of almost 15 years. Tenants include Aecom, Tag Worldwide and Uber.

In December 2014, Starwood Capital refinanced the Aldgate Tower with a £200 million whole loan, which reflected an LTV in the region of 70-75 percent. Starwood’s listed real estate debt fund, Starwood European Real Estate Finance, provided £45 million and the remainder was provided by Starwood Property Trust.

The Aldgate Tower reached practical completion in December 2014. It is located just outside the eastern boundary of the City of London, opposite Aldgate East tube station. Immediately adjacent is the White Chapel Building, which was formerly known as Aldgate Union. Derwent London agreed to buy the building with vacant possession from Royal Bank of Scotland last July for £132 million and is undertaking an £18 million refurbishment to deliver 200,000 square feet of offices later this year.

British Land and Barratt London are currently constructing the mixed-use Aldgate Place scheme nearby. The development will include 463 residential units, 19,000 square feet of commercial space and 14,000 square feet of retail space as well as a new hotel.