Lone Star has secured a £133m development finance facility from Lloyds Bank’s commercial real estate team and Wells Fargo for the Two Fifty One scheme near the Ministry of Sound nightclub in Elephant & Castle.
The scheme, Lone Star’s first investment in direct development in London, consists of a 41-storey residential tower and six-storey office building. Two Fifty Two will provide 335 new homes, 33,000 sq ft of offices and ground floor retail when completed in late 2017 in one of London’s most important regeneration areas.
Lone Star Real Estate Fund III, in partnership with developer Oakmayne Properties, acquired the previous sits of Eileen House in Elephant & Castle in May 2014 which was the subject of fierce opposition from the neighbouring Ministry of Sound nightclub.
London Mayor Boris Johnson approved plans for the new residential tower block in January 2014 despite opposition from Ministry of Sound owners who feared noise complaints could force the venue to closure.
The developer subsequently agreed to alter the block to protect residents from loud music with a revamped design including acoustic glazing and sealed window.
The nightclub and Oakmayne also agreed a “deed of easement”, which will allow the Ministry of Sound to continue with their current noise levels without fear of complaints from residents.
The 2014 planning approval followed an initial rejection of earlier plans by Southwark Council in 2011.
Musicians and DJs including Fatboy Slim – also known as Norman Cook – and Pete Tong had supported a campaign to protect the nightclub.
Madeleine McDougall, head of institutional clients, Lloyds Bank Commercial Real Estate, added: “Lloyds Bank is delighted to support Lone Star on this exciting development.
“Elephant & Castle is an area with enormous yet untapped potential and we feel that Two Fifty One will help to unlock some of that. This transformative scheme will act as a catalyst for major regeneration. We’re pleased to have backed another major new development in the capital that will help support job creation and growth in a newly flourishing corner of London.”
Robert Maddox, senior vice president, Wells Fargo UK Commercial Real Estate, added: “Lone Star is a long standing, core client of Wells Fargo and we are excited to support their first investment in direct development in London.”