Private equity company Quadrum has broken into the UK debt market with two West End residential conversion projects.
The company, which acts on behalf of European high-net-worth investors, has provided developer Chapman Button an £18m senior loan for the purchase of 20 Poland Street, W1, and boutique developer G&T London with a £13.6m, 18-month loan to convert 6 John Street, WC1, into residential.
The loan to Chapman Button is a short-term facility maturing in mid-2016 with a LTV of 70% and will aid conversion of the 12,000 sq ft office building to a JPB Architects-designed residential scheme comprising eight flats.
The G&T loan has an LTV of 84% and replaces a £6.8m, six-month bridging loan from Omni Capital. G&T is undertaking a £28m conversion of the 11,830 sq ft John Street office block into 14 flats.
Since entering the UK market in late 2013, Quadrum has only undertaken equity deals, including partnering with Amazon Property on the £26m purchase of British Land’s 52 Poland Street, W1, (pictured) in September 2014.
Its new lending comes at the same time as some experts believe the residential market may have peaked, with analysts at Jefferies issuing downgrades from hold to underperform for firms including Berkeley Group and Persimmon.
However, Quadrum said it was convinced investing in schemes near upcoming Crossrail stations would provide good returns (see p38).
Chief executive Oleg Pavlov said: “Today’s market is undoubtedly more competitive than it was several years ago and prices rarely go up in a straight line. We may see slower growth and more volatility in the near future, but at the same time we believe there are still attractive opportunities for investors and developers who are disciplined in their approach.”
joanna.bourke@estatesgazette.com
