US bank JPMorgan and London-based alternative lender Cheyne Capital have provided a £780 million (€905 million) refinancing package to UK developer Quintain for its Wembley Park residential scheme in London.
Speaking to Real Estate Capital Europe, Clare Morgan, head of corporate finance and treasury at Quintain, said the facility will be partly used to refinance standing assets it has developed at Wembley Park, the 85-acre build-to-rent development located around Wembley Stadium.
The loan replaces financing the developer agreed to in 2016.
“We had some upcoming maturities and debt across different facilities. We needed to consolidate into a more simplified structure,” Morgan said. “Recognising that the old financing dates back to a development facility and wasn’t reflective of our stabilised build-to-rent portfolio, it needed to be made fit for purpose.”
Since it broke ground on Wembley Park nearly 20 years ago, Quintain has completed more than 5,000 homes and invested £2.8 billion.
Morgan said this facility will not be used for further developments on the site but will instead refinance standing assets and consolidate debt. “We structure and agree specific development financings as and when they are needed, such as the two new residential buildings at the latest Wembley Park development site, called North East Lands,” she said.
The firm agreed a £277 million financing deal with JPMorgan in September 2022 – Quintain’s largest development loan to date – to support the delivery of 769 new homes. Seventy-four percent of the homes delivered will be BTR, and the balance will include shared ownership, affordable rent and discount market rent homes, with both residential buildings expected be completed by early 2025.
“There are headwinds facing the industry – interest rates, valuation movements – but the positives are BTR is incredibly well supported with support from lenders especially those who know us well,” Morgan said. “They understand what we do, that we are best in-class and have enjoyed an exceptional residential leasing success at Wembley Park.”
Market participants have told Real Estate Capital Europe the lack of supply for homes across Europe has been driving rental growth, making the asset class more appealing to investors and lenders alike. In the UK, annual rental growth across the country remained high at 10.4 percent in May, increasing by 0.2 percent month-on-month, according to real estate consultant Savills’ research published in July.