Deka Bank’s London office has backed NewRiver’s largest single-asset purchase to date with a £49m loan.
The loan finances the £120.3m purchase of the Broadway shopping centre and retail park in Bexleyheath, Kent, which NewRiver bought from clients of LaSalle Investment Management in April.
The relatively low loan-to-value ratio of 40% is typical for NewRiver, which is restrained in the leverage it uses in deals. It also fits with Deka’s prudent lending policy.
This is the first time Deka Bank’s London office has worked with the retail specialist.
Deka provided finance to LaSalle following its 2009 purchase of the mall. The new deal sees the bank roll the debt into a new facility for NewRiver.
It is also familiar with the out-of-town shopping centre market in the London commuter belt. Last November it provided a £36m loan to AEW Europe for its £71.6m purchase of the St Nicholas shopping centre in Sutton, Surrey.
That loan was provided at around 150bps over Libor, reflecting the income stream and low LTV on the asset.
Although the LTV on Broadway is lower, margins have risen slightly in recent months and the cost to NewRiver is expected to be at a similar level of around 150bps.
Deka and other finance providers, such as Wells Fargo, have sought to finance outer London shopping centres in recent months due to their catchment of commuters.
Broadway represents around 60% of Bexleyheath’s retail space and is 100% let to tenants including H&M, Boots, New Look and Marks & Spencer.
Rental income of £8.2m pa will more than cover the loan, which would have given Deka further confidence in rolling over the loan to its new owner.
• To send feedback e-mail mike.cobb@estatesgazette.com or tweet @MikeCobbEG or @estatesgazette
