Central London jv arranges EUR 288m financing

Great Capital Partnership (GCP), the central London joint venture between Great Portland Estates and Liberty International, has arranged a £225mln (EUR 288mln) credit facility to fund asset repositioning and investment projects.

The moves comes a month after GCP carried out a swap transaction involving three properties valued at £358mln, in the West End of London with The Crown Estates.

Great Portland said the joint venture, which held investment properties of around £650mln at end-December 2007, had no external debt. But the property swap had created 'refurbishment, development and asset management opportunities which could lead to significant rental income growth for the partnership'. In a statement, Great Portland said the partners would have the flexibility to use the credit facility to refinance their existing equity investment in the joint venture.

The credit facility has been structured as a non recourse, secured term loan maturing in 2013 and has been underwritten by Eurohypo, HSBC and Lloyds TSB. GCP will pay a margin which varies between 75-115bp depending on the level of loan to value and interest cover ratios. Great Portland said GCP anticipates operating at the bottom end of the margin range.

Commenting on the transaction, Timon Drakesmith GPE's finance director said: 'GCP has plenty of growth potential and despite the difficulties in the credit markets this deal demonstrates that debt finance is available at a sensible cost for well located property portfolios'.