Olayan Group, the Saudi Arabian owner of the Knightsbridge Estate, SW1, has raised £320m of fresh debt on the prime London pitch.
The investor, which paid £580m cash for the 3.5-acre slice of the capital’s most high-profile postcode last year, has lined up six banks to provide debt on the estate.
Eurohypo, Santander and ING are lending the biggest slugs of the debt, with the remainder split between BNP Paribas, Royal Bank of Scotland and Crédit Agricole.
The five-year facility is priced at 200 basis points above the five-year swap rate, equating to a total cost of 4-4.5%.
Knightsbridge is the second major deal for BNP Paribas following its participation in a syndicate of banks that provided finance for Carlyle’s £670m purchase of a portfolio of London offices previously part of Simon Halabi’s White Tower portfolio. The bank, which recently hired WestImmo managing director Peter Denton, is keen to boost its lending to the UK market.
Olayan has embarked on an asset management programme to extend leases and increase rents on the estate, which is flanked by department stores Harrods and Harvey Nichols and bounded by Brompton Road, Sloane Street and Hans Crescent. It plans to enlarge the floorspace on Brompton Road.
Olayan recently instructed retail agency CWM to help reinvigorate the tenant mix on the estate, which provides an annual rent of around £24m.
Talks are understood to be under way with superbrand Apple and fashion designer Tommy Hilfiger.
None of the parties involved would comment.
Olayan investment
Before making a big splash in the UK real estate market with its £580m acquisition of the Knightsbridge Estate from Avestus Capital Partners – formerly Quinlan Private – last April, Olayan had teamed up with Sir Stuart Lipton’s and Elliott Bernard’s Chelsfield Partners to buy the Elizabeth House site in Waterloo, SE1.
They will shortly submit plans for a 1.25m sq ft redevelopment of the site (p38).
Olayan is a long-term partner of Chelsfield, which is also involved in the Knightsbridge estate, and is understood to be backing the group on its bid for Shell House on the South Bank.
bridget.oconnell@estatesgazette
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