Dutch and German financiers ING and Landesbank Baden-Württemberg (LBBW) have attracted new Asian investors as well as core German and Japanese lenders already active in London for the syndication of a loan secured against the tallest tower in the City.
ING and LBBW funded the £400 mln (€476 mln) facility for the 43,000 m2 'Salesforce Tower' at 110 Bishopsgate in April 2016, representing a loan-to-value ratio of below 60%. The deal has an original maturity of five years with £30 mln amortisation.
The facility refinanced the existing debt, which had been put in place in 2013 with Starwood Capital. The consortium led by Heron International has been the sponsor group since the development phase.
LBBW and the real estate financing division of ING Bank have now completed the syndication by obtaining more than £200 mln worth of commitments. 'The success of the syndication vindicated our market view. In addition to European players, Asian players keep enlarging the liquidity pool available for the UK. The UK remains one of our key markets where we keep supporting our clients,' said Andreas Kessler, head of real estate finance syndication at LBBW.
New in London
Eight lenders have joined the syndicate, including Taiwanese, Korean, Japanese and Chinese institutions new to the UK commercial real estate market. Both ING and LBBW retain substantial chunks of the facility.
ING said that the entry of new institutions to the UK commercial real estate market suggested it was becoming less reliant on domestic or Continental liquidity. More than £100 mln of the commitments were secured before the UK Brexit referendum in June 2016. The transaction is arguably one of the few syndication exercises initiated before the UK Brexit referendum and completed after it.
The appeal of the asset was strengthened by the signing of a new lease in October with an existing tenant at a record level for the tower of £90/sq ft.
Gerald Ronson, CEO of Heron International, commented: 'The investors are pleased that the building has proved an attractive vehicle for a number of diverse lenders with its excellent location, build quality and tenant mix. The initial loan was secured on competitive terms pre-Brexit and it is a testament to the building and the London market that the syndication has proceeded so smoothly post-Brexit.'
110 Bishopsgate is the tallest tower in the City of London and has a BREEAM 'excellent' rating. The asset is named ‘Salesforce Tower’ after anchor tenant Salesforce.com, the American provider of cloud-based CRM solutions.
