Morgan Stanley and Bank of America have launched a £211.2 mln CMBS of the senior loan they made to Brookfield to buy nine UK retail parks.
The banks’ decision to securitise the debt is a sign that they, like others, now see sufficient investor confidence in the shopping park segment of UK retail to receive good demand for the debt. It is the seventh CMBS in Europe this year.
Agora Securities UK 2021 is a four-tranche transaction securitising a single senior loan backed by the nine properties spanning 2.35 million sq ft across 259 units.
The assets have been valued by Savills at £418.45 mln, and are 90% occupied. Pricing for the deal is expected next week.
Brookfield also took out an additional junior loan of close to £80 mln against the assets which was provided by non-bank lender Nuveen.
The properties include the seven parks which Brookfield acquired from Hammerson for £330 mln in an opportunistic deal completed last month. They are in towns including Didcot, Rugby, Telford, Middlesbrough and Falkirk.
The portfolio had been valued at the end of March 2021 in Hammerson’s book at £384 mln and they had been under offer to Orion at £400 mln before Orion pulled out of the deal in April 2020.
Last week, Brookfield finally closed on another opportunistic acquisition, of the former Plantation Place North office - now known as 30-33 Fenchurch Street - in the City of London.
The Canadian giant paid the trustees of Moise Safra £635 mln for the 550,000 sq ft building, circa 10% less than the £700 mln under negotiation last year.
The deal has been one of the longest-running in the London office market, with negotiations between the two parties ongoing for around 18 months. Before the outbreak of the Covid pandemic, Brookfield had been tipped to also buy the adjoining Plantation Place South, which is in different ownership, with the potential to create a huge new development.
Brookfield is also buying Milton Gate from Taikang Life for circa £215 mln. The Chinese life assurance company had hoped to sell for £250 mln when it began entertaining offers in April 2020.
