Specialist lender Urban Exposure has arranged two £100m-plus development loans in London’s booming residential market. It is jointly funding a £169m senior loan, with a new lender, for Wainbridge’s super-prime 11-15 Grosvenor Crescent redevelopment in Belgravia. It is also providing part of a £100.3m loan with LaSalle Investment Management for an Alchemi Group office-to-residential conversion in Victoria.
Urban Exposure introduced LetterOne Treasury Services to take most of the Belgravia project’s £169m of senior debt. LetterOne is akin to a family office for Russia’s Alfa Group. Its Treasury Services arm has $10bn of assets and invests in public and private equity, fixed income and direct lending, but this is its first development finance deal. Urban Exposure originates then syndicates loans, “co-investing a small portion and acting as loan manager”, said MD Randeesh Sandhu.
Wainbridge’s advisers Eastdil and Taylor Wessing ran a two-stage process to source the debt. Wainbridge has consent for 11 luxury apartments with a £350m gross development value. The facade and Grade II listed elements will be restored and the rest demolished and rebuilt. Grosvenor sold the buildings to the private equity firm earlier this year. Wainbridge’s principal Rob Rackind said: “We had an eclectic mix of competitive funding offers, from investment banks and bespoke funds to mainstream banks and high-net-worth investors.”
In the second deal, Urban Exposure and LaSalle are jointly providing just over £100m of senior finance for Alchemi’s redevelopment of 55 Victoria Street into 54 flats. The building will be stripped to its frame, extended and re-clad. LaSalle’s European debt investments team, headed by Amy Aznar and Michael Zerda, lends senior, junior and whole loans on private central London residential schemes and student housing, but avoids super-prime opportunities.
APG invested £238m with them in LaSalle Residential Finance 1 early this year. LaSalle also invests and manages other debt investment capital and previously financed a residential scheme for Hadley Mace in Greenwich with Urban Exposure. Nitin Bhandari, LetterOne’s head of principal finance, worked on their deal with Adam Wilton; they were previously at Nikko Principal Finance. Bhandari said it was “the first step” in providing more capital to European and US property. Savills, AECOM and Allen & Overy advised the lenders.
Northacre has raised a bridge equity loan to redevelop 1 Palace Street with Candys’ Omni Finance, while several other high-profile London residential projects are seeking finance. Brockton Capital’s £240m requirement to redevelop the former Mirabelle Restaurant and other buildings in Curzon Street, Mayfair, is probably the largest.