Real Estate Capital market commentary
• A number of jumbo refinancings took place over the summer, the largest being Aviva’s £936m to refinance Criterion Capital’s £1.8bn London assets and redevelop the Trocadero in London’s West End. In another, AIG, Legal & General and Rothesay Life agreed to provide £900m for Secure Income REIT’s UK hospital and leisure portfolios in a deal due to sign off soon. AIB, Barclays, HSBC, Nationwide and RBS refinanced Grainger’s residential portfolio with a low-leverage, £580m facility at 170bps over three-month Libor.
• Demand continues to be strong for finance for alternative assets, with three deals for care and social housing totalling almost £200m and two for student housing totalling around £100m. Legal & General, M&G Investments, Barclays and Santander provided care or social homes refinancing or development facilities. Investec provided £41.5m to Knightsbridge Student Housing to develop two sites in Southampton and MetLife supplied c.£60m to CLS Holdings for its Spring Mews student housing scheme in London.
• AIG is backing a futuristic, 250,000 sq ft scheme at Tottenham Court Road in the heart of London by Laurence Kirschel’s Consolidated Developments, with a £250m, 10-year development and investment loan. The project has a gross development value of up to £1bn and will connect to the Crossrail network.
• Wells Fargo converted its £72m speculative development loan made in 2012 for One and Two Pancras Square at London’s King’s Cross into a £120m investment facility. The US bank also provided a £100m loan for Clearbell Capital’s purchase of the Amber portfolio; a £75m, unsecured credit facility to Derwent London; and an £80m acquisition and refurbishment loan to Threadneedle for 20-21 St James’s Square in London, the Queen Mother’s home during her teens.
• Insurer Scottish Widows made its first, £20m CRE loan, to Custodian REIT, for acquisitions, while Japan’s Daiwa Capital investment bank made it first UK property loan: £12.8m to MRP and clients of Certa Capital for the purchase of 40-41 Great Marlborough Street in London, reflecting a 69% loan-to-value ratio.
• In Europe, Danish life insurer Sampension made its lending debut with two direct commercial real estate loans outside Denmark, totalling €67m, on a co-investment basis.
• The largest European deal was the €925m, seven-year refinancing by ABN Amro, HSBC, Rabobank, ING and KBC to car park specialist Q-Park, secured on assets valued at €1.4bn. The loan refinances a €1.15bn facility that would have matured in October 2016.
Click here to see tables of July & August 2015 deals REC 09.15 CW New lending p48-50