Pbb Deutsche Pfandbriefbank, Aareal and AshbyCapital have jointly underwritten a £90m debt facility for Korea’s MDM Asset Management and Hana Securities to refinance Gallagher Shopping Park in the West Midlands.
The refinancing represents AshbyCapital’s first debt deal, with the investment manager providing a three-year, £20m loan fixed-rate facility.
Retained senior lenders pbb and Aareal extended their existing financing arrangements for the retail park. The total LTV ratio was less than 70%.
AshbyCapital’s platform will focus on mezzanine and development finance opportunities between £10m and £50m.
Gallagher Shopping Park is located to the north-west of Birmingham at Junction 9 of the M6 in Wednesbury and has more than 230,000 sq ft of premium retail space. It is fully occupied.
The retail park was acquired from KKR in 2018 by a Korean real estate fund sponsored by MDM Asset Management and with Hana Securities as the principal LP. The asset is managed by Quadrant.
A spokesperson for Hana Securities said: “The challenges we confront in global real estate markets today are multi-faceted, and there is downward pressure on asset values. For Hana Securities, the best strategy to protect our global investments is to be proactive by demonstrating resilience and trusting our partners to confidently navigate the challenges we face.”
Charles-Etienne Lawrence, investment director at AshbyCapital, said: “Amidst more challenging market conditions than we have seen in recent years, a significant opportunity has presented itself in real estate debt, which is looking increasingly attractive due to revaluations and rising interest rates.”
Lawrence added: “Being in a sector that mirrors our equity investment expertise, we are confident in the security of this asset due to its strong fundamentals and resilient income, aided by Quadrant’s experienced asset management.”
Chris Gow, head of debt and structured finance at CBRE, which advised the Korean group on the refinancing, said: “Despite current market conditions and fluctuations in real estate yields, there is still strong debt liquidity for quality assets such as Gallagher Shopping Park. The robust performance of the asset and strong income generation recorded throughout the period of ownership resulted in several offers being brought forward and furthermore, we have been able to structure an attractive facility to ensure our client will benefit from future asset management potential.”
Christopher Daniel, founding partner at Quadrant, said: “Despite the retail headwinds, the park has remained relevant and continues to attract both shoppers and retailer interest. We now look forward to working with our partners to continue to enhance the park over the coming years.”
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