M&G Real Estate Finance says 2020 was its second most active year after it signed off a £303 mln (€335 mln) senior loan for Sun Venture’s acquisition of 1 & 2 Ludgate in the City of London.
The Singaporean asset manager paid Land Securities £552 mln (€610 mln) for the five-year-old building in December, putting the loan's LTV at approximately 55%.
M&G Real Estate is one of a relatively small number of lenders which continues to underwrite and hold very large bilateral loans for borrowers at a time when most large deals are having to be financed by clubs.
LandSec developed the 390,000 sq ft office building near St Paul’s in 2015, leasing it to law firm Ropes & Gray, the Commonwealth Bank of Australia and Mizuho Bank. It generates rental income of £23.7 mln a year.
During 2020 M&G Real Estate Finance deployed £1.66 bn across 10 deals in the UK, Europe and the US - the latter where it began lending more recently.
John Barakat, head of real estate finance at the M&G Investment business since its launch over 10 years ago, said: “While COVID created significant market uncertainty during 2020, we’ve found opportunities to invest capital into the market as our institutional clients continue to seek the secured cashflows and attractive relative returns real estate debt can offer.
“We see this trend continuing into 2021 as we continue to internationalise our origination capabilities, following on from our first US investment last year, as well as expanding our activity in development finance.”
Other loans written by M&G Real Estate Finance in 2020 included:
£353 mln to refinance two assets in London – another City of London office building and a Sainsbury’s superstore in Croydon.
€215 mln invested in Pan European logistics assets in France, Spain and the Netherlands
$195 mln invested in multifamily residential properties in the US
€90 mln loan to finance the acquisition of a large portfolio of multifamily residential properties in the Netherlands
Development financing commitments totalling £400 mln in the student accommodation, office and residential sectors
Paul Coates, the head of EMEA debt & structured finance at CBRE which advised Sun Venture, added: 'We were able to run an extremely competitive process with a targeted number of parties demonstrating strong appetite to fund Grade A office space.
'This highlights the long-term confidence in the London office market, despite the challenges posed by Covid-19 over the course of 2020. M&G provided competitive terms, meeting the tight time frames required.'
