Brookfield and China Life have agreed terms with LBBW for a £210m financing of their purchase of Aldgate Tower, E1.
The five-year loan reflects a loan-to-value ratio of around 60% on the circa £350m acquisition price paid to Aldgate Developments by the joint venture partners.
The funding deal will result in the Irish developer’s funder, Starwood Capital, being repaid.
The 16-storey, 320,000 sq ft office block’s location on the edge of the City prompted market sources to view LBBW’s financing as aggressive, particularly as the lending market has become more cautious since the beginning of the year.
Some other lenders that were asked to submit lending terms were unable to provide a loan of more than 55% loan-to-value at the margin the German lender was able to achieve.
The margin, understood to be less than 300bps over three- month LIBOR, was considered to be unachievable by all lenders except those with access to the pfandbrief, such as LBBW.
The building is let to tenants including Uber, WeWork, Tag Worldwide and Aecom.
It is the second time LBBW has backed a development deal for Brookfield. The bank was previously in a club with Santander and Credit Agricole to provide a £280m development loan for Principal Place, EC2, which is set to become Amazon’s London headquarters.
The structure of this deal is likely to change in the near future with 50% of Brookfield’s holding in the development currently up for sale.
LBBW has been more active than most lenders in the UK market in recent weeks. In addition to Aldgate Tower, LBBW has also taken a stake in ING’s £400m refinancing of Heron Tower, EC2.
Last month the German bank provided a £40m loan to fund Cain Hoy’s purchase of 17-22 South Audley Street, W1.
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