Development Securities gives Oriental City buyer another loan reprieve

Development Securities, the listed UK real estate developer and investor, has agreed to extend the due date on the £52mln (EUR 65mln) loan notes from the 2007 disposal of its Oriental City retail scheme until 15 September 2008 in order to give the purchaser more time to complete its financing arrangements.

This is the second time this summer that Development Securities has given the private property investor who acquired Oriental City for a total consideration of £68mln more time to pay back the loan portion of the transaction. Previously, the due date had been extended until 31 July 2008 from an initial 30 June 2008 deadline.

Development Securities said that interest on the £52mln loan notes had been received in full as of 31 July 2008. It noted that as part of the purchaser's financing arrangements that a minority proportion of the monies due under the loan notes may be deferred for an extended period beyond 12 months after September 2008. All payments under the loan notes are currently secured by way of a first charge on the property in favour of Development Securities. An amount equal to roughly 25% of the disposal price has already been paid to the purchaser to Development Securities who holds these funds on a non-refundable basis.

Development originally acquired the 9,300 m² Oriental City centre in 2005. It sold the property after planned consent was granted for a mix-used scheme comprising 28,000 m² of retail space, 31,500 m² of housing and a new 7,400 m² primary school.