GE Capital Real Estate ?continues to expand its London-based lending business after being selected to buy Deutsche Postbank’s £1.3bn pool of UK performing property loans.
The subsidiary of General Electric is buying the group of around 50 loans from Deutsche Bank, which owns 93.7% of Postbank, for a discount of less than 5% to face value.
The deal leaves a balance of fewer than 10 non-performing and sub-performing loans still to be sold for around £250m.
The Postbank loan purchase is the first major deal under Ellen Brunsberg, who succeeded Ilaria del Beato as GE Capital’s UK managing director in ?April, and is in line with its ambitions to rebuild a senior commercial mortgage lending business.
Postbank’s UK loan book, sold in a process called ?Project Tower, has an average unexpired loan term of just under 2.5 years, providing GE an opportunity to provide fresh finance as the current loans come to an end.
It is already increasing its activity in the market, closing two loans totalling more than £200m in the past six weeks.
It provided a £72.5m ?five-year senior loan-financing for Ares Real Estate’s £115m purchase of 10 Fleet Street Place, EC4, and a £130m five-year senior loan to finance Blackstone’s St Enoch shopping centre in Glasgow.
GE Capital beat competition from a final round of bidders comprising Ares with Citigroup and JP Morgan with Renshaw Bay.
The parties teamed up to make offers for the whole ?performing and non-performing loans, which were being marketed together.
Bank of America Merrill Lynch, AXA Real Estate, Royal Bank of Canada, Goldman Sachs and M&G Investments also made first-round bids.
Deutsche Bank is running the Project Tower sales process.
bridget.oconnell@estatesgazette.com
