AXA scoops Aldersgate debt pitch with sub-200bps offer

AXA Real Estate has won the pitch to provide debt finance for Ashby Capital’s 200 Aldersgate office building near The Barbican in the City.

In one of the most competetive finance tickets this year, the debt cost is below 200bps, at around a 60% loan-to-value level. A banking source said Société Générale is “fronting” the £135m, five-year loan and is “passing it straight on to [AXA]”.

Ashby had interest from at least 10 parties. One underbidder on the financing said its offer was turned down despite a favourable margin. “We offered a position at 175bps with 20bps market flex; 175bps was the best they received and 195bps was the worst. [The borrower] went for certainty.”

Ashby Capital, founded by Peter Ferrari, bought the refurbished, former Clifford Chance headquarters for £225m in September. The 434,000 sq. ft, multi-let building was the company’s first investment since launching in June this year with equity of £750m to invest for a Saudi Arabian client.

The financing of 200 Aldersgate was expected to set a benchmark for lower interest rate margins. De Montfort University’s mid year Commercial Property Lending Market Report, published last week and covering the 12 months to the end of June 2013, found a steep fall in lending margins in the first half of 2013.

The average margin for prime offices fell from 324bps at the end of 2012 to 280bps by June. Andrew Goodbody, vice-president of the Association of Property Lenders, said: “The increased level of competition in the market is clearly being reflected by the reduction in average margins and the increasing average loan-to-value levels shown in the report.”

 

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