Brazilian billionaire Moise Yacoub Safra is reportedly paying £500 mln (EUR 616 mln) to acquire the Plantation Place office scheme in the City of London in a loan-to-own strategy. The office scheme was tied up in a commercial mortgage-backed security (CMBS) which breached its loan-to-value conditions in 2008.
Brazilian billionaire Moise Yacoub Safra is reportedly paying £500 mln (EUR 616 mln) to acquire the Plantation Place office scheme in the City of London in a loan-to-own strategy. The office scheme was tied up in a commercial mortgage-backed security (CMBS) which breached its loan-to-value conditions in 2008.
The vendor was One Plantation Place Unit Trust, in which Schroder Real Estate Investment Trust; the property arm of London-listed logistics group Stobart and an Indian family held stakes.
Property Week reported the investment volume reflected a yield of more than 5.5%.
Schroders and Stobart Properties issued statements on Thursday to confirm the sale of the company that owns the building but they did not identity the buyer or confirm the investment volume.
Schroder Real Estate Investment Trust realised net proceeds of £11.73 mln on the sale of its 28.78% interest, while Stobart Property realising net proceeds of £8.1 mln.
Safra owns a 50% stake in Brazil's Banco Safra and his intention to acquire Plantation Place for about £500 mln has been widely reported in the media for some months.
It is understood that Delancey, the specialist real estate investment and advisory company led by Jamie Ritblat, advised Safra on the loan-to-own strategy to give him control of the 51,000 m² office property.
Plantation Place was developed by Sir John Ritblat - father of Jamie Ritblat - when he was CEO of British Land. Sir John Ritblat is an adviser to Delancey.
A group of investors, including Invista Foundation Property Trust (now Schroder Real Estate Investment Trust) bought the property from British Land for almost £530 mln at the height of the market in 2006. The debt financing for the deal was sold as a CMBS that year.
The securitisation was to mature in 2016 but the crash in real estate values when the property bubble burst led to a breach of the loan-to-value conditions in July 2008.
Andrew Sykes, chairman of Schroder Real Estate Investment Trust, said: 'Realising the investment in Plantation Place was identified as a key initiative to be implemented by Schroders following its appointment as investment manager in January 2012. As well as being significantly accretive to NAV, the proceeds of the disposal provide the Company with increased operational flexibility to pursue its key strategic objectives of improving dividend cover and achieving balance sheet efficiency.'
