Two European banks with strong Asia connections have won the deal to finance London’s ‘Cheesegrater’ alongside Bank of China, on behalf of the office tower’s Hong Kong buyer.
HSBC and ING are part of a three-way club with the Chinese bank which has provided more than £600 mln (€692 mln) for CC Land’s £1.15 bn acquisition of The Leadenhall Building, known as the Cheesegrater. The acquisition price was notable for its record, historically low yield of 3.4% for a City of London asset.
The banks’ facility is at a loan-to-value under 60% and the pricing has not been disclosed. But sources said that it will have been keen on a high-profile financing that many lenders were tracking and which could now be partly syndicated.
ING’s London-based Mike Shields, head of real estate finance in the UK, USA & Asia, said he was 'extremely proud' to be a co-leader on the transaction but that 'it wasn’t an easy deal to win'. He said two of ING REF’s key Asia team, head of real estate Robert Scholten and Hong Kong office head and director Joanne Ma, had been instrumental in securing an involvement, with the bank visiting CC Land the day after it was announced that the Hong Kong buyer has won the acquisition.
Tapping into growing international investment by Asian clients
ING has offices in 13 Asian cities with ING Real Estate Finance teams in Hong Kong, Singapore and Sydney. The bank began a particular push into the region two years ago on real estate lending, to capitalise on the growing international investing by Asian property clients.
By contrast, HSBC has had a strong presence over many years in Hong Kong and has been using that to win European business in Asia that is then executed by its London real estate finance team. Bank of China has an active European real estate lending team based in London, but it was the Hong Kong office which originated the Cheesegrater deal.
Shields said he believed that ING REF’s track record in financing other London trophy offices over the last two years had also helped the bank be selected. 'I think we got in there early and we made a strong case for ourselves, that we could add value. We’ve been involved in financing a lot of these types of assets, including the Salesforce and Gherkin City of London towers and people have been happy with our execution.'
CC Land, the listed company of billionaire Cheung Chung-Kiu, has snapped up another London office building this year, paying £292 mln in February, or a yield of 4.86%, for One Kingdom Street, Vodafone’s UK HQ next to the capital’s Paddington station.
Dickie Wong, deputy chairman and director at CC Land, said: 'We will continue to look for potential investment opportunities in this city, especially on those trophy and iconic buildings similar to The Leadenhall Building.'
