South African business magnate Natie Kirsh is in discussions with three banks to fund his £282.5m purchase of the City’s Tower 42.
Kirsh is talking to Royal Bank of Scotland, which is leading the negotiations, Austrian bank BAWAG and Dutch group ING in an effort to secure a senior club funding package.
It is understood that Deutsche Postbank participated in early talks before walking away when it could not reconcile potential terms to its own position. It is expected that Kirsh will secure a five-year facility of around £140m, reflecting a loan to value of 50%.
If an agreement is reached it will be only the second reported UK deal for new UK entrant BAWAG. It recently provided Blackstone with £160m in senior and mezzanine debt alongside Deutsche Pfandbriefbank’s and LaSalle Investment Management’s Special Situations Fund to fund its £214m purchase of Prologis’ Teal industrial portfolio.
The Kirsh Group exchanged contracts to buy the Tower Unit Trust, which owns the freehold interest in the Tower 42 Estate, in December in an all-cash deal, but wants to secure debt before the deal completes in April.
The 600ft tower is being sold by BlackRock UK Property Fund, LaSalle Investment Management and Hermes Property Unit Trust in a deal that reflects an initial yield of 7%.
The estate also includes the 36,000 sq ft 20 Old Broad Street, 49,000 sq ft 30 Old Broad Street and the 3,500 sq ft Plaza Restaurant on Broad Street, as well as the 46,000 sq ft 15 Bishopsgate, and the Grade I-listed, 13,000 sq ft Gibson Hall on Bishopsgate.
bridget.o’connell@estatesgazette.com
