Real Estate Capital market commentary
• Blackstone has refinanced two portfolios of logistics assets for its Logicor business, agreeing almost £1bn of new debt. In one of the largest UK underwritings in this cycle, Goldman Sachs led on a total of £680m of five-year debt at a 70% loan-to-value ratio, with LaSalle Investment Management jointly underwriting about £50m of junior debt. The loan’s blended margin is around 200bps. Meanwhile, HSBC and ING won the mandate to refinance Logicor’s French assets with €400m of debt.
• In another UK logistics refinancing, M&G, Barclays and RBS provided a £300m, five-year loan to refinance Brockton Capital’s and Dunedin Property’s UK industrial portfolio.
• The largest deal closed was £705m of finance for Qatar Investment Authority’s acquisition of the HSBC Tower in London’s Canary Wharf. The money was lent by a small European/Middle Eastern club: Lloyds, Qatar National Bank and DekaBank.
• German banks have been busy closing deals, with Aareal following its jumbo €530m Q1 2014 underwriting for Northstar’s pan- European office portfolio acquisition from SEB with another office portfolio loan, on three Madrid buildings. It participated in several big retail loans, including £400m of low leverage senior debt for TH Real Estate to refinance its £1.1bn UK Retail Warehouse Fund, alongside Wells Fargo and Helaba. Helaba also agreed to finance Orion’s German office portfolio acquisition from CS Real and a Finnish logistics portfolio.
• Berlin Hyp continues to seal deals, refinancing part of UK REIT Redefine’s German retail assets and another large retail portfolio, for Patrizia. It also lent to US sale-andleaseback specialist WP Carey, in Rotterdam.
• Of all the German banks, pbb Deutsche Pfandbriefbank’s activity across Europe stood out in the past month, with at least eight deals totalling almost €1.5bn. The bank, which is for sale, reported an 8% rise in lending during Q1 2015 and this growth is likely to have gathered pace through Q2. Among its recent deals, it lent €23m on an asset in Barcelona and said it was ready to ‘intensify its lending’ in Spain.
• Oxford Properties refinanced its London trophy office building Watermark Place, after selling 50% of the property to Union Investments. It achieved pricing fixed at close to 3% for 10-year money from Pricoa Mortgage Capital.
• UK REIT Hammerson put together a club of nine banks to provide a £415m, five-year revolving credit facility at an 80bps margin — 10bps below British Land’s £485m revolving credit facility, arranged with a club of seven banks in February, and close to LandSec’s £1.25bn, five-year loan at an initial 75bps margin, secured last month. The new Hammerson facility almost halves the cost of the company’s existing £505m facility, which
carried an initial 150bps margin and was due to mature in April 2016.
• Canada Life investments made its first foray into the UK student housing market with a £31m, 15-year, fixed-rate facility to Empiric Student Property, secured on eight student housing schemes. The new loan has a rate of 3.97% and is fixed up to a loan-to-value ratio of 50%.
Click here to see April and May 2015 deals: Capital Watch: Recent lending deals