German bank closes £450m of lending to three UK assets in a single day, paving the way for autumn follow-up to landmark Chiswick Park CMBS
Deutsche Bank has underwritten £450m of new UK loans, which are likely to form the basis for another CMBS deal. The German bank, which last month re-opened the European commercial mortgage backed securitisation market by securitising its £302m loan on Chiswick Park, closed on three loans last week worth more than £450m in total. A source with knowledge of the deals said: “In this market, that is quite a decent underwriting amount to close on one day.”
The new loans are secured on the Merry Hill regional shopping centre in the West Midlands, the Design Centre in Chelsea Harbour in London and Milton Park, a business park in Oxfordshire. The Merry Hill debt refinanced one of the two largest loans in the DECO 12-UK 4 CMBS; the borrower is Queensland Investment Corporation, which owns 50% of the 1.7m sq ft scheme. Westfield owns the remainder.
The £145m Milton Park loan, made to MEPC, is also a refinancing of an existing securitisation. MEPC will use the new seven-year facility, along with cash from recent sales and equity, to complete the prepayment of a £470m loan securitised via Eurohypo’s Opera Finance conduit, ahead of its maturity in July 2012. The third loan, secured on Chelsea Harbour, is to Marcol Group, a private property company owned by well-known investor Mark Steinberg.
At a Commercial Real Estate Finance Council seminar on 6 July, Deutsche Bank’s head of CRE European capital markets, Heath Forusz, said the bank would be in the market again with two more CMBS deals: a UK multi-loan, multi-borrower transaction and a euro-denominated German multi-family housing CMBS. It is thought that the bank will wait a few weeks until after the quieter summer period before structuring and marketing the UK deal, using some or all of these loans and possibly others.
The bank is also marketing a ‘repackaging’ of €225m of CMBS bonds that it bought back in another DECO deal. The repackaging is based on €225m of class A1 and class X bonds, out of an original €950m tranche in DECO 2007-E5X, now called DECO 2011-E5X A1X. The collateral is German multi-family housing. Deutsche Bank still owns the class X notes and had been buying back the class A notes at discounted prices. It has now topped up the coupon from Euribor plus 16 basis points to Euribor plus 300bps, using available excess cash from the X-notes.
The expanding bank is taking on Paul Coles in its London-based property team. Coles has been working at LBHI Services, on the Lehman Brothers European real estate assets in Chapter 11 administration. As debt servicer for Treveria’s €216m of securitised debt, Deutsche Bank has agreed to a one-year loan extension to July 2012, to allow the German retail investor to deleverage to a loan- to-value ratio that will make a refinancing viable.