Allianz and DRC Capital have completed a €182.5m (£150.3m) refinancing of a prime German shopping centre owned by Evans Randall.
The German insurer has provided a €145m senior facility at a fixed rate of 3.5% pa with no amortisation for the first two years. European Real Estate Debt II Sàrl, advised by DRC Capital, has also provided a mezzanine facility of €37.5m.
Both facilities are for a seven-year term, and fully replace an existing facility from HSH Nordbank.
Evans Randall said the term was “a core element of [its] strategy, being to take advantage of historically low interest rates and pursue longer-term value-enhancing asset management initiatives” at Königsbau Passagen, the largest mall in Stuttgart.
It added that the banks were chosen “following an extensive and proactive market review…of numerous organisations from the UK, Europe and the US which involved traditional and non-traditional lenders including mezzanine providers and leading insurance institutions”.
The privately-held UK investment banking and private equity group bought the newly developed mall from a subsidiary of HSH Nordbank for €220m (£147m), a 5.25% yield, in October 2006.
The company said it had delivered a substantial enhancement of the asset by adding a high-end food lounge in August 2013.
This scheme is fully let and is now generating income in excess of €700,000 pa, equating to circa €14m in terms of additional capital value.
Kent Gardner, chief executive of Evans Randall, said: “The successful completion of the recent redevelopment works was a key step in our strategy to create additional value through increasing occupier and consumer appeal.
“Combined with a robust refinancing deal with leading lenders, this has added to the investment appeal of this prime international asset, providing the means to further drive increases in rental income and capital growth. ”
Königsbau Passagen comprises 260,000 sq ft of retail space in more than 70 shops, 180,000 sq ft of prime office space and car parking below the centre with 415 spaces.
Located alongside the historic Königsbau building, built in 1856 and formerly the home of the Stuttgart Stock Exchange, Königsbau Passagen is the largest shopping centre in Stuttgart, with more than 3.3m people living in its catchment area.
bridget.oconnell@estatesgazette.com
