Eurohypo is to provide up to £86m of debt for Max Property Group’s and Newmarket Property Holdings’ £156.3m purchase of St Katharine Docks, at a loan-to-value ratio of 55%. The 60/40 joint venture has agreed to buy the asset, net of acquisition costs, from AREA Property Partners and F&C REIT Asset Management.
Max Property Group will inject £42.2m of equity, while Newmarket Property Holdings will stump up £28.1m. Max Property Group plans to refurbish the 500,000 sq ft office, retail and leisure scheme to boost its £12.6m annual rental income. One possible candidate for refurbishment is 130,000 sq ft office building Commodity Quay, which is likely to fall vacant next year.
St Katharine Docks backs a defaulted £168.7m loan that is part securitised in Taurus CMBS (UK) 2006-4 (TAURS 4). The £129m A loan will be repaid in full on October’s interest payment date, while the non-securitised £39.7m B loan is likely to suffer a principal loss. The loan defaulted on its LTV covenant in April 2010, falling into special servicing after the borrowers failed to repay the outstanding balance at maturity last July.