BMO acquired Parkgate Shopping Park, one of the top five largest retail parks in the UK, from the Hercules Unit Trust (HUT) last month.
Lloyds carved from the whole loan an approximate £35m mezzanine loan, priced at 750 basis points over three-month LIBOR, and sold it to Quadrant Real Estate Advisors, the US private lender with long-term aspirations to lend in the UK and Ireland.
The mezzanine underwriting follows the implementation of a new-look real estate finance team at Lloyds, following last November’s recruitment of Madeleine McDougall, who joined as head of origination in the global corporate real estate business from Deutsche Pfandbriefbank.
More recently, Ab Shome joined as director in Lloyds’ loan market team, replacing Rupert Gill who left the bank for Hatfield Philips in June 2014.
The £112m senior loan, priced at just under 200 bps, will be partially retained and partially sold down. The syndication process is ongoing.
Parkgate is fully occupied and consists of around 565,000 sq ft of retail warehouse and restaurant space on a 40.6 acre site. In total, the site provides accommodation for 42 retailers and 2,250 free parking spaces. Anchor tenants include M&S, Morrisons, Next, Boots and H&M.
For Quadrant Real Estate Advisors, the £35m Parkgate loan reflects its largest UK mezzanine investment to date, having built up a circa £100m UK loan book over the last two years.
Quadrant provides senior, stretched senior, mezzanine and construction loans from £10m up to £75m. For mezzanine loans, Quadrant aims to be the sole or dominant controlling class in transactions.
Quadrant, which has AUS$500m (c.£230m) committed by Australian pension funds for investment into the UK and Ireland, also offers bridge loans.
Recently, Quadrant provided a bridge loan to Natrium, the joint venture between D2 Private and funds managed by Cheyne Capital Management, which acquired the iconic Clearys department store in Dublin.
The facility provides finance to Natrium while it seeks to secure planning permission for a change of use for the building.
BMO formerly traded as F&C REIT prior to its July corporate rebranding after last year’s acquisition of F&C Asset Management by BMO Financial Group.