Deutsche Finance International and Yoo Capital have agreed a £875 mln (€1 bn) development loan facility with Goldman Sachs merchant banking division, to part-finance the redevelopment of Olympia London.
The loan follows equity pledges from German institutional investors Bayerische Versorgungskammer (BVK) and Versicherungskammer Bayern Group (VKB), and means that the £1.3 bn scheme is now fully funded.
John Hitchcox, chairman of Yoo Capital, said: 'This is a boost for London and a clear indication of investor confidence in this transformative project to regenerate an iconic landmark.
'We’re moving into a pivotal year for the redevelopment, and with the finances of the exhibition business, investors as well as local community stakeholders now safeguarded, we can look forward to delivering a destination that showcases London at its very best, with culture and creativity right at its core.'
With the main construction contract expected to be awarded imminently, initial construction work on the Olympia project, which is designed by Heatherwick Studio and SPPARC architects, is due to begin this quarter.
The masterplan will see the full redevelopment of the 14-acre site, including the existing exhibition halls, with 1.3 million ft2 (120,700 m2) of additional commercial space being created. The final scheme will include a cinema, arts theatre, music venue, restaurant and music club, shops, cafés, two hotels and 2.5 acres of public space, such as pedestrianised squares and a sky garden.
Gavin Neilan, co-founder and co-managing partner at DFI, commented: 'To have secured a commitment of this level from Goldman Sachs is a compelling endorsement of the Olympia project, and indeed of the long term outlook for London as a global tourist and business destination.
'We are very grateful for the ongoing support of all our funding partners and, with the development now fully funded, we have a solid foundation to move forward with our plans to transform this iconic location and unlock Olympia’s enormous potential.'
Chris Semones, managing director at Goldman Sachs merchant banking division, said: 'The history, heritage and location of this development, and the clear potential it holds, present a compelling investment case and we are very pleased to be partnering with DFI and Yoo Capital to support what will be one of the most exciting projects in London over the coming years.
'This transaction continues our strategy for Real Estate Credit Partners III to originate large loans to hold against high quality projects with excellent sponsorship.'
