Grosvenor Fund Management has refinanced the four-strong Grosvenor London Office Fund (GLOF) with a £201m senior loan from BNP Paribas Corporate and Investment Banking and Sumitomo Mitsui Banking Corporation (SMBC).
The fresh financing for GLOF, which replaces a legacy £110m facility with Lloyds, follows the £68m acquisition of 92,000 sq ft Fleet Place House on Holborn Viaduct in July from AM Alpha, the German family trust.
AM Alpha only acquired Fleet Place House itself 18 months early, in February 2013 from The Crown Estate for £57m, reflecting a 19.3% premium and highlighting the yield compression for prime London offices over the period.
Just weeks prior to the acquisition of Fleet Place House, Grosvenor Fund Management acquired the remaining 50% stake in Hammerson’s London headquarters at 10 Grosvenor Street which it did not already own for £54m for GLOF, valuing the office block at £108m.
GLOF also owns a 50% stake of the circa 273,000 sq ft Belgrave House, at 76 Buckingham Palace Road in Victoria.
The fourth and final asset in GLOF is the 100,000 sq ft freehold of Almack House at 28 King Street in St James, valued at around £165m.
The approximate LTV on the BNP Paribas CIB and SMBC senior loan is circa 38%, based on an estimated valuation of GLOF of just above £500m.
BNP Paribas and SMBC acted as joint mandated lead arrangers on the financing and hedging, and BNP Paribas acted as agent.
Romain Simon, head of real estate finance UK, BNP Paribas said: “We are delighted to have the opportunity to support Grosvenor London Office Fund in financing a portfolio of such high quality assets. It demonstrates our willingness to support our key clients.”
Robert Carney, head of EMEA real estate at SMBC said: “We are very pleased to have worked with both Grosvenor London Office Fund and BNP Paribas on arranging the refinancing. This transaction demonstrates SMBC’s commitment to expanding our client led financing capabilities in the UK real estate market.”
Giles Wintle, regional director, Grosvenor Fund Management, Europe said, “We are delighted to build on our relationships with BNP Paribas and SMBC. We remain committed to the London office market and this fund, together with London Office II, is core to our activity in the UK.”
Back in May, SMBC refinanced Almacantar’s CAA House on 43-59 Kingsway and 1 Kemble Street in a £60m facility with Crédit Agricole CIB.
In March, BNP Paribas was one of three lead arrangers taking around a £140m participation in a wider seven-strong banking syndicate for Capital & Counties Properties’£665m five-year revolving credit facility.