MetLife and TH Real Estate finance Gaw Capital consortium’s Buckingham Palace Road buy

MetLife and TH Real Estate are jointly providing a £274.1m 10-year senior loan to finance 123 and 151 Buckingham Palace Road in London’s West End which was acquired by a consortium led by Gaw Capital Partners.

MetLife was the lead lender extending £149.5m, or 54.5%, of the senior facility while TH Real Estate, on behalf of TIAA-CREF, provided £124.6m.

Gaw Capital’s consortium acquired the two adjacent properties for approximately £498m, reflecting a net initial yield just north of 5%, as revealed by CoStar News in mid-October.

CoStar News understands that the all in blended cost of the financing was in the mid 3% range, which implies a margin of approximately 160 basis points after the UK 10 Year Gilt Index, currently at 1.9%, is subtracted.

The properties, which together provide 480,000 sq ft of office space with retail offering at ground level, were sold by Eastdil Secured on behalf of Divco West and its operating partner, London Global.

Eastdil Secured also acted on behalf of Gaw Capital’s new consortium ownership in securing the acquisition finance.

123 Buckingham Palace Road is government let while 151 Buckingham Palace Road is let to a mix of blue chip companies, including Google which currently has 78,000 sq ft, as well as PA Consulting, Eni and Sky Media.

The GAW-led consortium is thought to be considering combining both assets and deliver circa 500,000 sq ft of refurbished or redeveloped space to the supply-starved West End market. However, no final decision has been made for the two buildings.

“We are delighted to have provided another loan to Gaw Capital Partners and help them acquire this landmark West End investment property,” said Barry Worth, a director in MetLife’s London office.

“We are also excited to collaborate on our first co-financed, fixed-rate loan in London with TH Real Estate advising TIAA-CREF.”

Christoph Wagner, Director of Debt Strategies at TH Real Estate said “We are very pleased to have seamlessly worked with MetLife’s highly experienced team to jointly deliver an attractive financing structure in a short timeframe to support Gaw Capital’s acquisition.”

Peng Han Lee of Gaw Capital Partners said “This is a rare and wonderful opportunity to re-unite such a large estate in a prime area of London’s West End after two decades of separate ownership.

“The ongoing regeneration of Victoria both North and South of the train station will only serve to further improve on the location and increase demand for a high quality office product.

“We are excited to implement our business plan to create a unique offering reflecting the Gaw Capital’s creative DNA and maximizing value for our investors.”

About CoStar News

Finance Editor, CoStar News
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