Debt asset manager AgFe has raised £1.4bn of capital for investment in senior commercial mortgages in two new UK funds and is on course to raise £2bn. Retirement specialist LV has mandated AgFe to put up to £1bn into investment-grade mortgages over the next four years in the
friendly society’s first move into senior property debt.
AgFe will originate fixed-rate, five to 20-year, bilateral loans ranging from £10m up to £100m. It is also about to hold a first closing on around £400m with three UK institutional investors for a second fund that will make shorter, three to five-year, floatingrate loans. AgFe hopes to raise a total of £1bn for this fund as well. The fixed-rate fund will target average returns of 200 basis points over gilts and the floating rate fund will look for similar returns over Libor.
AgFe head of real estate Natalie Howard said the manager has a good pipeline of deals. “In the £10m-£30m loan category we are seeing a lot of deals and there doesn’t seem to be many banks lending there,” she added. “The assets tend to be well-located properties with long leases let to investment- grade tenants, often in regional cities and locations. They suit longer-term lending, as the properties tend to be in the hands of
owners who are not generally asset sellers.”
Howard said AgFe is also prepared to be flexible about redemption penalties on fixed-rate loans, although, “we’re finding that borrowers are not concerned about Spens prepayments, because they are more focused on loan pricing. “Our floating-rate, shorter-term fund is more appropriate for opportunistic investors buying value-added assets and looking to sell within three to five years.” The launches are the culmination of two years’ of fund-raising and put AgFe on the map as the first independent firm to raise so much capital for UK debt funds.
Investment mandate: Australian giant recruits Rockspring for Euro push
AustralianSuper, the A$75bn superannuation fund that is assembling a direct property portfolio overseas, has recruited Rockspring Property Investment Managers to buy large office and retail assets in continental Europe. Rockspring will focus on landmark offices, both stand-alone and part of larger, mixed-use schemes, in principal continental European markets, as well as dominant retail investments such as prime super-regional shopping centres. This is AustralianSuper’s second appointment of a Europe-based real estate manager, after it awarded two mandates to TIAA Henderson Real Estate to invest in UK prime shopping centres and central London offices.
UK debt deals: Crédit Agricole funds deal for Oxford Street block
Crédit Agricole CIB has arranged £95m of senior debt for Pramerica Real Estate Investors and a client of Tribeca. The three-year loan, including a £15m capital expenditure line, is secured on 431-451 Oxford Street in central London, opposite Selfridges. Crédit Agricole sold part of the senior debt to Prudential Capital, the US debt investor. Pramerica’s PRECap IV junior debt fund has a preferred equity interest in the block and underwrote the whole loan for the £136m acquisition last December. Tribeca is the asset manager. Eastdil advised Pramerica and Tribeca.
German debt deals: LBBW and ING back two German buys for Hines
Hines has acquired two mixed-use German assets with two separate debt finance deals from LBBW and ING. Kö-Quartier in Düsseldorf and
Kronprinzbau are the first purchases for a new Luxembourg fund set up by Hines for an investor client. Hines paid around €206m for the
55,000m2 Kö-Quartier, with LBBW providing about €175m of acquisition financing and a development loan. Benjamin Biehl, a director of Hines Immobilien, said: “Five of the buildings are core and two are outdated. We will demolish those to rebuild brand-new offices in the heart of the banking district.” ING is providing around €90m of senior debt for Hines’ €145m acquisition of the 25,500m2, mixed-used Kronprinzbau
building in central Stuttgart.
UK debt deals: LaSalle provides £89m for resi-led London project
LaSalle Residential Finance has agreed an £89m debt package to fund a £200m, housing-led development in London. It is providing a four-year whole loan for City North Finsbury Park, a big regeneration scheme of 308 private flats for sale, 47 affordable homes and 120,000 sq ft of commercial space being developed by United House Developments and local entrepreneurs the Morris family. The debt’s loan-to-cost level is thought to be under the fund’s 75% ceiling and the top gross development value of 65% for the housing, which represents a majority of the project’s £200m value.
CMBS servicing: Note trustee pushes to swap Windermere servicer
US Bank Trustees, the note trustee to €342m of loans in the Windermere XIV European CMBS, said it will proceed with the disputed replacement of Hatfield Philips International as the loans’ master servicer and with the appointment of Mount Street as HPI’s successor. Windermere XIV noteholders voted for the change in January, but Hatfield Philips has opposed it, saying it should be paid
for special servicing duties “which have led or will lead to concrete and measurable value creation for noteholders”. Hatfield Philips said it “intends to sign the documentation to facilitate the transfer of servicing… once a reasonable agreement on liquidation fees is reached”. However, the note trustee says this is not a condition for termination and liquidation fees “can be agreed separately between Mount Street and HPI after the termination is effected”
UK debt deals: DekaBank puts up £100m for Covent Garden offices
DekaBank has provided £100m of refinancing for 90 Long Acre, an office building in Covent Garden, London. Last May US private equity firm
Northwood Investors paid around £165m for the 194,000 sq ft building with existing debt of £121.5m in place, part of Lehman Brothers’ Windermere XI CMBS. Deka’s five-year refinancing is a defensive real estate play alongside new equity from Northwood. The facility is thought to be moderately leveraged at a loan-to-value ratio of around 55%. The multi-let building is the UK base of Wells Fargo’s real estate lending team. It has been refurbished and empty space relet, taking occupancy to near capacity.
UK debt deals: Student loan is first for Laxfield’s GIC programme
Laxfield Capital’s GIC-backed lending programme has made its first loan since the strategy was launched nearly 18 months ago: a five-year, £90m facility for student housing provider Urbanest. The loan is secured by the 221-bed Hoxton scheme near Old Street roundabout and Urbanest St Pancras, a 310-bed development on the Regent’s Canal, which will also provide 40 apartments. The LTV ratio is 70% and part of the
loan will be syndicated in line with the programme’s strategy. GIC is expected to keep the top 55-70% LTV portion. Alex Lanni, Laxfield’s head of transactions, said: “We like the asset class for the right sponsor, providing the right type of student housing.”
Financing mandates: CBRE wins retail work as Eastdil takes Sanctuary
Private equity group Carlyle has hired CBRE Capital Advisors to find debt for three European retail centres, including Alochete outlet mall in Lisbon, Portugal. Meanwhile, Eastdil has been mandated by Henley Investments to finance the 227,000 sq ft Sanctuary Buildings in London SW1, after buying the office block from Tishman Speyer. UK REIT British Land is seeking £300m of debt to refinance a retail portfolio held
by one of its five Tesco joint ventures. A club of five lenders — Eurohypo, Helaba, Crédit Agricole CIB and Nationwide — financed the debt in 2009.
Appointments: Willingham to head Euro real estate finance at HSBC
Steve Willingham is joining HSBC’s global and banking markets division as head of European real estate finance. Willingham, who was responsible for financing European acquisitions at private equity firm MGPA for five years, will report to HSBC’s global head of real estate finance, Matt Webster. BlackRock bought MGPA last October when Willingham became MD for portfolio management for European value-added property funds. HSBC is expected to increase its continental property lending soon.