This Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email [email protected].
Investment manager Cale Street has provided a £480M development loan to AXA IM Alts to fund the development of a new office building at 50 Fenchurch Street in the City of London.
The loan is a six-year facility that will finance the construction of the 650K SF office building where demolition and enabling works have already begun. The loan has been extended before any pre-lets have been secured, and AXA said it is the largest speculative development loan in the City since the beginning of 2023. YardNine is the development manager.
The building will include more than 1.5 acres of outdoor space and terraces, with balconies on the majority of levels and public gardens on the 10th level, which will provide river views over the Tower of London and Tower Bridge. The building is targeting a BREEAM Outstanding certification and will aim to be net-zero in operation.
Cale Street is backed by the Kuwait Investment Office and specialises in large, complex debt transactions.
FINANCE
The Abu Dhabi Investment Authority has backed Cheyne Capital’s latest UK and European debt fund, the ninth in its series. Cheyne did not specify the size of ADIA’s latest investment but said the latest tranche took its overall backing of the fund series to £650M.
Cheyne said its debt funds provide “solutions across the capital structure,” including subordinated debt, hybrid credit and commercial mortgage-backed securities.
Cheyne’s recent deals include a £780M loan alongside JPMorgan to Quintain for the refinancing of the huge Wembley Park build-to-rent scheme and a £318M loan to Goldman Sachs-backed Riverstone for two later-living developments in London.
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M&G Investments has announced the first close of its latest series of European real estate debt funds, including £350M of capital from four clients.
The latest funds reached a first close with £200M in investment from LGPS Central Ltd., £100M from the Prudential With-Profits Fund and £25M from one of the UK’s largest insurers. M&G said it will raise further capital for these funds and segregated mandates over the next 18 months, adding that the funds are seeking “potentially double-digit returns available from direct commercial real estate loans in Europe.”
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European hostel chain a&o has earmarked €500M for expansion in Europe, including London, with a strategy of converting existing office and retail properties into hostel space.
Compared to the construction of a new building, a&o said property conversion plays a big part in reducing emissions. The plan will contribute to its goal of becoming Europe's first net-zero hostel chain by 2025.
“According to experts, the savings are equivalent to the CO2 emissions of up to 30 years of operation,” a&o said in a statement. “Currently, a&o's CO2 footprint is 3.73 kilograms per night, which is up to 80% lower than industry competitors.”
The cities a&o is targeting for expansion are London, Paris, Rome, Madrid, Lisbon, Berlin, Munich, Prague and Amsterdam.
DEALS
ALMCOR and private equity firm Cerberus Capital Management have bought an industrial outdoor storage asset for their platform.
The JV has spent £20M on a 30-acre multilet industrial and open storage site at Bridgwater, in the south-west of England.
“The asset offers low site coverage, a strong income base, and multiple asset management angles underpinned by excellent transport links to the M5,” ALMCOR said in a release.
The duo also recently bought Leyland Business Park in Preston, a 48-acre multilet industrial and open storage site, and Melton Commercial Park in Melton Mowbray, a 90-acre multilet commercial estate. The deal was undertaken off-market.
