Lloyds backs South Yorkshire retail with £148m whole loan

Lloyds Commercial Real Estate has provided a £147.5m, five-year whole loan to Bank of Montreal (BMO) Real Estate Partners, formally known as F&C REIT, for the purchase of Parkgate retail park in South Yorkshire.

The facility reflects a loan-to-value of 85% on the purchase price of £175m, which BMO paid to Hercules Unit Trust in August.

Lloyds has sold the £35m junior tranche to US-lender Quadrant Real Estate Advisors and will syndicate a portion of the senior, in line with its “originate to distribute” whole loans model. The lender said it will retain “a significant portion of the debt so that it remains the embedded relationship bank”.

“This deal demonstrates the strength of our ability to underwrite significant transactions, supported by our in-house loan markets expertise,” said Madeleine McDougall, head of institutional clients at Lloyds Commercial Real Estate.

“Parkgate is one of the UK’s strongest retail park assets and a destination in its own right to a large catchment area. It boasts a wide range of retailers and restaurant outlets giving it broad appeal to consumers and retailers alike,”

“In BMO Real Estate Partners, it has been acquired by a first class asset manager who will be focused on driving future value growth and opportunities. We intend to work with them as a long-term partner to support their aspirations for Parkgate,” said McDougall.

BMO Real Estate Partners is the specialist real estate arm of BMO Global Asset Management, which is part-owned by Canada’s BMO Financial Group, and has £6.9bn of assets under management. F&C REIT was bought by BMO last year and rebranded to BMO Real Estate Partners in July.

“The financing agreement provides us with a platform that will help to underpin our long-term investment into this premier asset,” said Zvi Noé, director of investments at BMO Real Estate Partners. “We look forward to further strengthening Parkgate’s appeal to thousands of shoppers and businesses in the area.”