Cornerstone Real Estate Advisers Europe has completed a £150m senior debt financing in its second European lending deal.
The subsidiary of US insurance giant MassMutual has closed the fixed-term facility with investor and developer UK & European Investments, which owns a number of central London blocks including the 100,000 sq ft office 1 Kingsway, WC2 .
The loans are secured against a portfolio of six prime assets located in central London and the South East.
The new fixed-rate, nine- and eleven-year mixed-maturity £150m facility has a weighted average unexpired lease term of 9.8 years. It is in line with Cornerstone’s core lending strategy, which offers loans with maturities ranging from seven to 20 years.
Laxfield Capital advised Cornerstone on the deal, which was its largest real estate lending transaction in the UK to date following its maiden loan of £83m to Derwent London in August last year.
Cornerstone said the loan was in line with its strategy of extending into Europe its $27bn (£16.7bn) US commercial real estate debt platform, which completed $5.25bn in real estate transactions in 2012.
The transaction follows the appointment in July of former RBS banker Chris Bates as head of European real estate finance.
UK & European Investments chief executive Barnaby Kelham said the facility would be used “to expand the portfolio and development programme. This will allow us to make new acquisitions fast without need for any third-party debt”.
Cornerstone Europe chief executive Charles Weeks said: “This transaction coincides with the first anniversary of our entry into the UK lending market and with this deal and others in hand, Laxfield Capital has done a great job in helping us meet our objectives.
“With Chris now leading the ongoing development of the debt platform in Europe, we are hoping to maintain this momentum in the UK and beginning to look at wider opportunities in Europe, as they develop.”
Nick Pink, chief investment officer of Cornerstone Europe, said: “This transaction typifies Cornerstone’s core lending strategy in the Europe. UK & European Investments is a top-tier sponsor and this portfolio of prime assets, secured against strong covenants with a long average unexpired lease term, is ideally suited to long-term finance.”
Adam Slater, managing director of Laxfield Capital, said: “In the past 15 months we have generated and executed an excellent pipeline of opportunities for Cornerstone to help it gain traction in the UK market and successfully fulfilled the target for the first year.”
bridget.oconnell@estatesgazette.com
