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TH sources £210m loan for UK retail fund

TH Real Estate has sourced £210 million of debt from Royal Bank of Scotland and BNP Paribas to finance its UK retail fund, Real Estate Capital has learned.

TH Real Estate has sourced £210 million of debt from Royal Bank of Scotland and BNP Paribas to finance its UK retail fund, Real Estate Capital has learned.

The five-year facility, provided on a 50/50 basis by the banks, is understood to be secured at the fund level by the UK Shopping Centre Fund, which is managed by TH Real Estate.

A stake in Birmingham’s Bullring is one of four assets within TH Real Estate’s UK Shopping Centre Fund

In total, the £711 million fund is invested in four prime UK assets; the 1.5 million square foot St James Centre in Edinburgh, a 33.3 percent stake in the 1.1 million square foot Bullring in Birmingham, the 500,000 square foot Whitefriars in Canterbury, and the 480,000 square foot Princesshay in Exeter.

The loan is believed to finance one of the four assets at around 50 percent loan-to-value. The financing is comprised of a term loan and a revolving credit facility element. Overall, the fund has a maximum gearing level of 30 percent.

The deal represents the first time TH Real Estate has banked with BNP Paribas, although it has previously borrowed from RBS.

In 2012, Henderson Global Investors, as the business was known as the time, secured a seven-year extension for the UK Shopping Centre Fund, giving it a further life of ten years. The Jersey-based property unit trust, which was established in July 2004, was originally due to terminate in 2014. The fund life will now run through until 2021, with a redemption window available in 2017.

In 2015, TIAA-CREF acquired the remaining ownership interest in TH Real Estate from Henderson Global Investors, giving it sole ownership of the company.

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