Argent is accelerating its search for fresh funding for two key office buildings at the £2bn King’s Cross Central project.
The developer has been approaching potential investors as well as lenders as it ploughs ahead with initial works on the 56,000 sq ft B2 and the 123,000 sq ft B4 offices, which form part of a cluster of 11 office buildings on the 67-acre site.
Last year, the consortium was in advanced talks with German bank Eurohypo to finance the first commercial phase of the scheme, but discussions ended when parent Commerzbank suspended new lending at its property finance unit.
However, the temporary freeze is to be reviewed in June and if it is lifted it is possible that Eurohypo will revisit the speculative finance deal.
Investors such as sovereign wealth funds and overseas funds have also been approached as all funding options are explored for the site, which has attracted high-profile tenants and is frontrunner to land the coveted Google headquarters requirement.
Argent’s joint chief executive, David Partridge, said the company is constructing the basement of the two buildings and said he was “confident they will be fully under way before the end of the year” but would not comment on funding.
The market for development finance has become extremely challenging since the onset of the credit crunch, as the list of lenders willing to finance speculative schemes dwindles.
An earlier deal with a consortium of banks, including Eurohypo and Deutsche Postbank, to bring forward buildings including the University of the Arts campus, collapsed in 2008.
As a result, Argent, backed by the Hermes-managed BT Pension Scheme, pulled together an 11th-hour funding package with its partners, landowners London & Continental Railways and DHL-Exel.
The package comprised £150m of equity from the partners and £100m from incoming tenant Central Saint Martins College of Art and Design.
bridget.oconnell@estatesgazette.com
