Alejandrina Catalano
Macquarie has arranged the financing for LDC's £307m acquisition of the NEC Group from Birmingham City Council. LDC is Lloyd's regional mid-market private equity group.
Maquarie originated and structured the debt as a whole loan, which is being tranched and syndicated. Macquarie introduced RBS and two others to the syndicate pre-closing and will be keeping a significant holding until maturity in six and a half years. .
There will be no let-up in the capital, particularly equity from Asia and North American opportunity funds, flowing into European real estate in 2015, according to Emerging Trends in Real Estate Europe, a forecast published jointly by the Urban Land Institute (ULI) and PwC.
The report - an annual one, based on surveys and interviews with more than 500 major real estate players - found 70% of investors expect more equity and debt will flow into their markets this year. "It is easier to get capital than to find good deals," said one of the survey's respondents. Almost two-thirds think core assets are overpriced, and that they will need to take on more risk to achieve required returns in 2015.
Helical Bar has obtained a £165m revolving credit facility from HSBC for its Barts Square scheme, in the City of London, held in joint venture with The Baupost Group. The new loan provides funding for the construction of Phase 1 of the project, which incorporates 144 residential units, 24,000 sq ft of offices , retail/restaurant space and accompanying public realm improvements and refinances an existing £35m facility from HSBC.
Standard Life Investments is launching the Commercial Real Estate Debt Fund, its second vehicle to provide senior debt on UK commercial real estate.
Targeting around £250m of capital, the new fund is designed for institutional investors and Standard Life's group pension scheme has committed £100m. The fees are 50bps on net asset value, with no performance fee.
More lenders are writing high LTV loans to sell on chunks later, reports Alex Catalano
In Europe, whole loans have been gaining traction. “Whether it’s banks or debt funds like ours, there is a lot of activity in this space,” says Rob Harper, head of Europe at Blackstone Real Estate Debt Strategies.
“Whole loans” is a term loosely applied to financings at higher-than-senior loan-to-value levels, organised by one lender, usually with the intention of selling part of it. They can take different forms, and the term can be a confusing one.
Barclays, for example, provided £335m for Oaktree’s and Patrizia’s purchase of three UK business parks from MEPC, dubbed Project Aviemore. The bank kept the senior and the mezzanine was provided by Highbridge Capital Management.
Jason Constable, head of specialist real estate at Barclays, says: “Our aim is to be the principle originator of the entire loan and distribute the risk as appropriate, as we did on Project Aviemore, but we will work with trusted counterparties to club the facility from day one, or to participate in a senior syndication run by a junior lender.”
Investment banks have previously been the main whole loan providers; they were commonly used for CMBS before the crisis. More recently they have used them for big financings, syndicating or selling most of both tranches.
Banks may cut new lending to raise capital reserves if they fail tests, reports Alex Catalano
On December 16th, the Bank of England will unveil the results of its stress tests to see if eight UK lenders have enough capital to withstand a bad shock to the economy.
The general feeling is that Barclays, HSBC, Lloyds, Standard Chartered, Co-operative Bank, RBS, the UK arm of Santander and Nationwide probably will pass the test, even though the BoE’s worst-case scenario is harsher than that of the recent European Banking Authority’s Europe-wide ‘comprehensive assessment’.
“It’s hard to make comparisons between the two, as the methodology is different,” says Samuel Tombs, senior UK economist at Capital Economics. “But as one or two UK banks only passed the EBA test by a slim margin, there’s a risk banks will have to raise more capital, hindering new lending.”
Banks may cut new lending to raise capital reserves if they fail tests, reports Alex Catalano.
On December 16th, the Bank of England will unveil the results of its stress tests to see if eight UK lenders have enough capital to withstand a bad shock to the economy.
The general feeling is that Barclays, HSBC, Lloyds, Standard Chartered, Co-operative Bank, RBS, the UK arm of Santander and Nationwide probably will pass the test, even though the BoE’s worst-case scenario is harsher than that of the recent European Banking Authority’s Europe-wide ‘comprehensive assessment’.
“It’s hard to make comparisons between the two, as the methodology is different,” says Samuel Tombs, senior UK economist at Capital Economics. “But as one or two UK banks only passed the EBA test by a slim margin, there’s a risk banks will have to raise more capital, hindering new lending.”
Laxfield study shows jump in debt requests, especially for acquisitions, writes Alex Catalano.
The UK’s real estate debt market has moved into expansion mode. Financing requests are up to a seven-year high, with acquisition-related borrowing pulling ahead of refinancing and diversification into mixed portfolios, industrial, hotels and student housing, according to Laxfield Capital’s Q2-Q3 UK debt barometer.
“In the past six months the big signs of dysfunction have almost gone at the core end of the market,” says Emma Huepfl, Laxfield’s head of capital management. The barometer logs a pool of 496 loan requests totalling £46bn.
US private equity firm hires Deutsche Bank's Gabriele Magotti
Investors more confident of lender appetite and debt delivery, says Laxfield Capital.