MediaCityUK, home to the BBC and ITV in Salford, Manchester, has been refinanced with a new £277m loan, Real Estate Capital can reveal.
Developer Peel Group sold a 50% stake in the 37-acre complex to Legal & General Capital last week and the refinancing is part of the ownership re-structuring to bring the loan-to-value of the asset down in line with the strategy of the new institutional part-owner.
Lloyds Bank and Citigroup have jointly arranged and underwritten the new five-year loan. The facility reflects a loan-to-value of close to 55%, based on a value for MediaCityUK of £500m when the deal with Legal & General completed. Both banks are to launch syndication strategies of the loan in the next few weeks.
The deal repays a £325m loan issued by Citi, Lloyds, and ING Real Estate Finance which had a minority share, issued in December 2013. That loan had a five-year term.
Wes Barnes, head of European real estate at Citigroup global markets, said: “We are proud to be supporting Peel and LGC in what is an exciting regeneration scheme that is already firmly established as a thriving media and creative hub. We look forward to continuing our good relationship with both companies in future phases of development.”
John Feeney, managing director, global head of commercial real estate at Lloyds Bank Commercial Banking, said: “This transformational scheme is energising Salford Quays and the wider Greater Manchester and North West economies. As this new phase of ownership unfolds, we’re proud to play a continuing role.”
MediaCityUK comprises 1.6m sq ft of development and as well as the BBC and ITV includes the University of Salford. It includes studios, offices, incubator space, residential, hotels, retail and leisure. Following the deal with L&G, Peel will continue to asset and development manage the scheme.
The attraction of lending against and investing into the scheme is in part due to its capacity for further growth, including the 4.9m sq ft second phase. The finance will in part be used to build this out.