A four-strong consortium including Native Land and Grosvenor have sourced a four-year £200m in development financing from two Singaporean banks to develop a 72-strong luxury apartment complex in West London with an end value estimated at £550m.
Oversea-Chinese Banking Corporation (OCBC) Bank and DBS Bank have split the four-year £200m development loan 50:50 to finance the Campden Hill development, undercutting term sheets from Barclays Bank, Lloyds Bank and Royal Bank of Scotland.
CoStar News understands that the pricing for on the £200m development loan was around 350 basis points over three-month LIBOR plus a one-off 150 basis points upfront fee, illustrating both the international capacity for development finance and the tightening in margins over the last 12 to 18 months.
The four-strong consortium – which also includes Hotel Properties Limited (HPL), the Singaporean hotel, property and retail group, and Amcorp Properties Berhad, the Malaysian property, engineering and infrastructure group – is due to start on the on the former Holland Park School this Spring.
The finance from the two Singaporean banks was sourced through HPL. Native Land is development manager for the project on behalf of its partners; Grosvenor, HPL and Amcorp.
The debt facility will enable Native Land, on behalf of the partnership, to develop 72 private apartments set amongst extensive, private landscaped gardens adjacent to Holland Park, all benefiting from large terraces or balconies.
As part of the scheme, 97 units of mixed-tenure affordable housing will also be developed on three sites across the Royal Borough of Kensington and Chelsea.
While all parties declined to comment on pricing, in a prepared statement last Friday, Alasdair Nicholls, chief executive of Native Land, said: “The Campden Hill financing is a further success for our strategy to deliver both prime residential developments and high quality affordable housing across Central London, in partnership with major international investors.
“We are extremely pleased that HPL’s long term relationship with both banks coupled with Native Land’s established track record has enabled the partnership to secure significant development finance for the project.”
In January 2013, Native Land and HPL also secured a £91.73m development facility from OCBC Bank for the redevelopment of 30 Old Burlington Street into a residential apartment block. The joint venture partners acquired the Mayfair property from Standard Life Investments for around £85m.
OCBC Bank, a direct senior lender and CMBS investor in the previous property cycle, was also a cornerstone participant in the two-tranche £790.2m development facility for the redevelopment of Battersea Power Station.