The bank syndication market is showing signs of re-opening in another step towards increasing liquidity for property borrowers. Eurohypo is talking to banks about placing up to £50m of a facility of around £120m it provided to fund the £183.5m purchase last week of 3 Hardman Street in Manchester’s Spinningfields, by Glenn Arrow UK Property Fund.
Eurohypo also arranged finance for the building’s development three years ago, by Allied London Properties. Margot Waddup, head of syndication at Eurohypo, said: “Last year everyone wanted a seat at the table as part of a club, but now there are more banks active and a shortage of deals. “[Arranging] a club deal is incredibly time-consuming and if a bank only has a small team to work on it, it can be difficult.
“I hope we will get back to the model where there are banks underwriting. Some clients are keen to pay for the ease and speed of execution.” Other banks are also thought to be testing the potential for underwriting, particularly Lloyds Banking Group, Barclays Corporate and Royal Bank of Scotland, where Sam Atkins is looking at deals.
Barclays is placing some of the £100m it underwrote on Victoria House, while WestImmo is placing £30m of the £82.6m loan it underwrote for Meyer Bergman’s purchase of 50% of the Bentall Centre in Kingston this month. The Aviva Linked Property Fund sold the 50% stake for £130m and kept 50%.
Nigel Chapman, head of syndication at WestImmo, said: “For the right deal there are signs of an emerging market for syndicating deals, but only for sensible ones. “It gives the underwriting bank a chance to make a bit more money, while helping the borrower, because they are dealing with just one bank.”
Eurohypo and Lloyds have been tipped as two banks that have the credit approval to potentially underwrite an acquisition of all, or part, of the White Tower CMBS portfolio of London office buildings, in a joint venture with another bank.
This month CB Richard Ellis fired the gun on the sale of the nine buildings, which were assembled by investor Simon Halabi and are now worth around £1bn, putting eight of the properties on the market in two tranches. Sources said the debt needed to finance their acquisition is about £550m.