Qatar Investment Authority (QIA), the sovereign wealth fund with reported assets under management of around $300bn, has financed the acquisition of HSBC’s global headquarters in Canary Wharf with a £705m senior loan from three relationship banks.
The five-year £705m senior financing – which reflects a 60% loan-to-value (LTV) – has been split approximately 40-40-20 between Lloyds Bank, Qatar National Bank and Deka Bank, respectively. The loan is priced at around 135 basis points over three-month LIBOR, CoStar News understands.
This equates to participations of approximately £282m by both Lloyds Bank and Qatar National Bank, while Deka Bank provided circa £141m on the five-year senior loan.
QIA acquired the 1.1m sq ft HSBC Tower from National Pension Service of Korea (NPS) all-cash for £1.175bn last December, beating underbidder Ping An, China’s second-largest insurance company.
QIA’s long-running financing track for the HSBC skyscraper pre-dates its selection as preferred bidder last autumn, with the sovereign wealth fund asking lenders to submit terms based on both 50% and 60% LTVs, before settling on the latter track.
In addition, QIA required prospective lenders to commit to substantial holds of their participation in the loan which effectively ended any meaningful bids by the major investment banks.
Among those relationship bank lenders which pitched for the financing mandate were Wells Fargo and Barclays, the British bank of course having received around £6.1bn in emergency capital from QIA’s parent, Qatar Holdings, to stave-off a government bailout at the height of the global financial crisis.
Qatar’s sovereign wealth fund, ultimately owned by the Qatari royal family, has assembled a considerable trophy London commercial and residential property portfolio.
This portfolio includes: The Shard, Europe’s tallest office block; the Olympic Village, in a joint venture with Delancey; the Shell Centre on the South Bank, in a joint venture between Qatari Diar, a subsidiary, and Canary Wharf Group; the residential redevelopment at Chelsea Barracks; a 50% stake in One Hyde Park; the former US embassy in Grosvenor Square; and Grosvenor Waterside, the Thames-side residential development in Chelsea.
Yesterday, QIA and Brookfield Property Partners completed the £2.6bn acquisition of Canary Wharf Group, including 6.2m sq ft of developed office space worth £5.7bn, according to the CBRE November 2014 valuation, and the retail property portfolio comprised a further £1.02bn, according to a C&W valuation at the same time.
All parties declined to comment.