Renshaw Bay, the independent asset manager, and Deutsche Bank have completed the £58.1m refinancing of three student accommodation blocks in the North of England owned by Abanar LLP.
Deutsche Bank provided a five-year £45.8m senior loan, priced at around 400 basis points over three-month LIBOR, while Renshaw Bay extended a £12.3m mezzanine loan, priced at an IRR of around 11%-12%. The senior and junior loans funded last Monday.
CoStar News understands that the aggregate £58.1m reflects a high LTV, similar to the matured 80% LTV loan for the legacy Deutsche Bank securitised loan, Ubrique Holdings Limited loan in DECO 11 – UK Conduit 3 CMBS, which previously secured the two Huddersfield student accommodation blocks.
Assuming a similar 80% LTV this time around, implies that the three properties are valued at £72.6m.
South Street, the independent specialist student accommodation manager, was engaged by Abanar the investor which owned Gersey-based Ubrique Holdings Limited, as well as a third block in Sheffield, two years ago to source a refinancing.
Renshaw Bay, which arranged the financing on South Street’s behalf for its investor, began preliminary refinancing talks before Christmas, with Deutsche Bank brought in by Renshaw around April.
Adnan Shaikh, legal director at South Street, said: “We started talking formally with Renshaw Bay in January, and when Renshaw Bay suggested bringing in Deutsche Bank for the senior we were delighted because the investor has a deep relationship with them.”
Shaikh added that the three student accommodation blocks have been 100% occupied over the last four to five years with strong, consistent cash flows.
For Deutsche Bank, the UK regional senior loan reflects the investment bank’s willingness to look outside the major Western European capital cities – London and Paris in particular – to source new deals which offer a margin premium to secondary locations.
Last week, Deutsche Bank funded an €82m five-year senior loan to PPF Real Estate’s seven-strong predominantly office portfolio throughout regional Netherlands.
PPF Real Estate, a developer and investor with a focus on Czech Republic and Central and Eastern European (CEE) commercial properties, secured the Deutsche Bank financing against its circa €145m-valued portfolio, comprised of six offices and one retail assets , each in different regional cities across the Netherlands.
Deutsche Bank’s €82m, at a 56.5% LTV, was priced at above 400 basis points over three-month EURIBOR.
Two months ago, Deutsche Bank arranged and closed the largest regional-denominated hotel refinancing in the UK since the global financing crisis, dubbed Project Thirteen.
Deutsche Bank arranged a £585m senior and junior package for the 61-predominantly Holiday Inn hotels, with a small number of Crowne Plaza’s. Around 45% of the portfolio, by value, was outside London and London airport locations.
GIC Real Estate, the majority equity owner, deepened its investment in the portfolio by taking out the €155m junior loan, priced at circa 11%-12% IRR. While the £430m senior ticket was split between five lenders: GE Capital Real Estate, Deutsche Bank, LaSalle Investment Management, HSBC and AXA Real Estate.