Russian finance backs super-pime resi in London

Russian vehicle LetterOne is helping to finance a super-prime residential scheme in London's exclusive Belgravia district.

LetterOne and Urban Exposure have signed an agreement to jointly fund the acquisition by London-based property investor Wainbridge of 11-15 Grosvenor Crescent from the Grosvenor Group for £114 mln (€135 mln). The deal also covers the redevelopment of the site.

The gross development value of the scheme is anticipated to be in the region of £350 mln.

The loan is being arranged and funded jointly by LetterOne and Urban Exposure. Urban Exposure originated the loan and has also been appointed loan asset manager.

Luxembourg-based LetterOne was created by Russian consortium Alfa Group to manage its non-Russian and CIS businesses and financial resources. The multi-strategy investment vehicle with assets in excess of $28 bn (€21 bn), is a recent entrant in the European real estate and asset-backed financing markets and is looking to invest a significant proportion of its $10 bn of liquid assets in large-ticket private transactions.

Urban Exposure was recently named by Savills as one of the top 12 residential development 'big ticket' lenders. It has recently completed financings of £500 mln on a variety of schemes, including Greenwich Square, a £225 mln regeneration scheme with the Hadley Group.

Westminster City Council has awarded planning consent to Wainbridge for the demolition of the existing offices and the development of the property into 7,400 m2 of super-prime residential space. The scheme will comprise 11 apartments overlooking Belgravia, with associated parking and leisure amenities. Demolition is expected to start in early 2014 with the development to be completed by 2017.

Nitin Bhandari, head of principal finance and special situations for LetterOne, commented: 'This transaction represents the first step in the implementation of LetterOne’s strategy of providing tailored capital solutions to high quality partners in the European and US real estate and asset backed markets.'

The lenders were advised by Allen & Overy Solicitors, Savills and Aecom. Wainbridge was advised by Taylor Wessing Solicitors and has employed Flanagan Lawrence Architects for the scheme who recently worked on One Hyde Park and The Shard apartments.