Grosvenor secures competitive Liverpool ONE refinancing as shopping centre comes of age

Grosvenor, the real estate company owned by the Duke of Westminster, has refinanced the 2.4m sq ft Liverpool ONE shopping centre with a seven-year £410m loan from a five-strong club of banks.

Grosvenor logoGrosvenor, the real estate company owned by the Duke of Westminster, has refinanced the 2.4m sq ft Liverpool ONE shopping centre with a seven-year £410m loan from a five-strong club of banks.

Royal Bank of Scotland is once again the lead bank on the refinancing, having the club deal at each refinancing since the original £457m construction loan for the scheme back in 2004. RBS is the largest participant in the deal with around £130m.

Crédit Agricole CIB has also re-committed in the refinancing after joining the in the previous £385m in December 2010.

In addition, BNP Paribas, Société Générale and Sumitomo Mitsui Banking Corporation all join the club, replacing the then Eurohypo (now Wells Fargo) and Dekabank.

The 2010 refinancing valued the Liverpool ONE shopping centre at approximately £640m, based on a club loan LTV of 60%.

In the subsequent five years, improvements to the shopping centre’s lease profile as well as considerable yield compression in prime shopping centres, has enabled the Liverpool ONE shopping centre to increase in value by around 53% to approximately £980m.

This implies a LTV on the new £410m facility of around 42%. CoStar News understands that the margin is around 130 basis points over three-month LIBOR, with a modest premium given for the bank club loan’s seven year term.

Chief Executive James Raynor said: “We are delighted with the pricing and terms achieved on the facility, and are very pleased with the composition of the club of lenders. We would not have been able to achieve such a positive outcome without their support.”

Liverpool ONE shopping centre, which includes more than 165 shops, 500 apartments, two hotels and 25 restaurants, is owned by the Grosvenor Liverpool Fund, managed by Grosvenor Fund Management.

Hermes, Redevco, ADIA and Santander’s UK group pension investment vehicle, managed by LaSalle Investment Management, collectively own around 80% of the Grosvenor Liverpool Fund. Santander’s acquired Liverpool Victoria’s equity stake two years ago. Grosvenor retains a circa 20% equity stake.

Raynor added: “This is an exciting milestone for the fund and follows a strong 12 months that saw investors committing to the modernisation of the fund earlier in the year. These combined activities have provided us with a stable platform from which to implement a long-term asset management strategy for Liverpool ONE and reflects Grosvenor Fund Management’s ongoing commitment to Liverpool.”

Miles Dunnett, portfolio director for the Grosvenor Liverpool Fund, added: “It has been another successful year for Liverpool ONE. Occupiers have seen sales growth of 9% and footfall is up 2.5%, both of which are ahead of the UK average.

“As a result, there has been unprecedented occupier demand and more than 25 new stores opened in 2015, with many brands choosing Liverpool ONE for their regional debuts, or first stores outside London. New arrivals include Ugg, Wahaca and the White Company.

“Momentum is already building for 2016, Living Ventures open a bar and restaurant in January, and Victoria’s Secret will open a 10,000sq ft flagship store before the summer.”

The shopping centre opened in 2008.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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