The latest stage of development at King’s Cross Central, N1, has been financed with a £75m development loan from Wells Fargo.
The 170,000 sq ft office building, dubbed R7, which gained approval from Camden council in April, will have a total development value of close to £150m, equating to a loan-to-value ratio of around 50%.
The building is being developed and funded by the US bank prior to any of the 145,000 sq ft of office space being let. Despite the pick-up in the development finance market in the past year, debt for speculative development is still rare.
The building’s good location and the long-standing relationship between the two parties gave Wells the confidence to provide the finance. Wells’ predecessor, Eurohypo, was one of the wider scheme’s early funders.
The building includes 25,000 sq ft of leisure space, of which 9,000 sq ft in the basement has been let to Everyman Cinemas. It is due to complete in summer 2017.
R7 sits on the north side of the canal and forms part of the wider 67-acre scheme, which is being developed by Argent and owned by Hermes Investment Management, AustralianSuper, DHL and the government-owned London & Continental Railways.
The latter two are selling their combined 42.5% stake, which is expected to fetch around £400m. It is due to fully complete in 2020 and have an end value of £5bn.
RBS provided £100m of debt to the King’s Cross Partnership in February to develop Three and Four Pancras Square.
Barclays provided a further £215m of funding for the 67-acre King’s Cross Central project in June.
