Nomura, the Japanese investment bank, has extended a three-year £237m whole loan to the owners of the iconic Camden Lock market, which is set to trigger a syndication of part of the mezzanine component in the near term.
Camden Market Holdings Corp (CMHC), the company set up by Richard Caring, Bebo Kobo and Chelsfield Partners to own and operate the iconic Camden Market site in London, have agreed the enlarged financing of the legacy £225m IBRC senior loan.
CoStar News understands that the £237m whole loan is split broadly 80-20 across senior and mezzanine, implying around £190m in senior debt and £47m in mezzanine.
Nomura has structured with a tranche for developing a new local school, as part of the planning permission for the Hawley Wharf scheme.
While Nomura is thought to be comfortable holding the risk on balance sheet, a partial sale of the circa £47m mezzanine tranche is now expected, while a sell-down of the senior is possible but not definite thereafter, CoStar News understands.
Senior underbidders included Barclays, Royal Bank of Scotland and Helaba, while Och-Ziff and DRC Capital both pitched for the mezzanine tranche.
CMHC’s efforts to refinance the legacy IBRC loan have been protracted, not least because the underlying real estate is esoteric with no single underlying lease and instead a large number of agreements with individual stallholders in the Camden Lock market.
Furthermore, there are no direct investment comparables while the development land for which the future end value could vary. As a result, pricing on the senior and mezzanine facility is atypical and likely at a premium to current market norms.
Stanley Sidings, the management entity of CMHC, confirmed in a statement that the three-year facility is scheduled to mature on January 30, 2017, and will refinance debt previously provided by the Irish Bank Resolution Corporation, formerly known as Anglo Irish Bank.
Planning permission for the Hawley Wharf scheme together with outline permission for the school was granted by the London Borough of Camden in November 2012. A detailed application for the school will be submitted to Camden in February.
In a statement, Roger Cattermole, head of global markets, EMEA, at Nomura said: “We see strong future potential in the asset and fully support the company’s strategy to further develop and enhance the site. The Camden Market site is world renowned and Nomura is delighted to work with the management team, who has shown great skill in managing the project over several years.”
Bebo Covo, the founder of Stables Market, and visionary behind the Hawley Wharf development together with Richard Caring, said: “We are delighted to announce this re-financing and want to pay tribute to Nomura’s ABS and Real Estate team, which has recognised the great brand value we have in Stables Market and Hawley Wharf.
“The backing of Nomura also now provides us with the opportunity to seek further investment for the new markets, residential and commercial phases of Hawley Wharf.”
Mark Alper, managing director of Stanley Sidings: “Nomura has taken an innovative stance as it sees the regeneration potential for us to create an even stronger visitor and local experience at the iconic canal side markets as well as delivering a much needed school and homes.
“The new school is very important to us and to Camden, and we have worked very hard throughout the past year with the school, Camden and the community to make sure it is of a high standard and meets all requirements.
“Camden has been looking for such an opportunity for many years, and we are happy to confirm that the school will now be delivered. Assuming we achieve reserved matters approval for the detailed design of the school this spring from Camden, we expect to start work this summer and see the school open in September 2016.”
The Camden Market site in London is one of London’s premier retail and leisure destinations and attracts over 40 million visitors each year.