ING and LBBW complete £400m landmark facility
ING and Landesbank Baden-Württemberg (LBBW) completed the syndication of a £400m facility secured against London’s landmark 110 Bishopsgate, attracting Asian investors new to the London market as well as core German and Japanese lenders. ING and LBBW funded the facility in April 2016 and have since attracted more than £200m worth of commitments, reflecting a strong appetite from the market. Eight lenders in total have joined the syndicate, including Taiwanese, Korean, Japanese and Chinese institutions new to the UK commercial real estate (CRE) market. Both ING and LBBW have substantial final takes.
This April, the two arrangers funded the £400m facility, representing a loan to value below 60%. The deal has an original maturity of five years with £30m amortisation. This new facility refinanced the existing debt, which had been put in place in 2013 with Starwood. The consortium led by Heron International has been the sponsor group through development to now.
The entry of new institutions to the UK CRE market suggests it is becoming less reliant on domestic or Continental liquidity. More than £100m of the commitments were secured before the UK Brexit referendum in June 2016. The transaction is arguably one of the few syndication exercises initiated before the UK Brexit referendum and completed after it.
Moreover, the asset gained momentum, with a new lease signed in October with an existing tenant at a record level for the tower (£90/sq ft).
Gerald M. Ronson, CEO of Heron International, commented: “The investors are pleased that the building has proved an attractive vehicle for a number of diverse lenders with its excellent location, build quality and tenant mix. The initial loan was secured on competitive terms pre-Brexit and it is a testament to the building and the London market that the syndication has proceeded so smoothly post-Brexit”
Mike Shields, Head of Real Estate Finance for USA, UK and APAC at ING, said: “This has been an exceptional transaction and we are delighted to welcome so many new investor partners from across the globe in the financing of this outstanding asset.”
Jean-Maurice Elkouby, head of the ING Real Estate Finance syndication desk commented: “We are very pleased with the outcome, this is good news not only for us, but for the entire market as it proves that deals can still be done in spite of the result of the referendum. We are delighted to have provided the client with a significant underwriting when they required it.”
Andreas Kessler, Head of Real Estate Finance Syndication at LBBW, said: “The success of the syndication vindicated our market view. In addition to European players, Asian players keep enlarging the liquidity pool available for the UK. The UK remains one of our key markets where we keep supporting our clients.”
110 Bishopsgate is the tallest tower in the City of London and has a BREEAM ‘excellent’ rating. The asset is named ‘Salesforce Tower’ after anchor tenant Salesforce.com, the American tech company with $49bn market cap providing cloud-based CRM solutions. The tenant roster of the building is well diversified representing sectors such as law, asset management and serviced office among others.