Wells Fargo is funding Aerium’s £63m purchase of New Uberior House and Princes Exchange in Edinburgh.
The US bank is providing the European fund manager with a £41m facility – reflecting a loan to value of 65% – to complete its purchase of the 158,000 sq ft buildings in the Scottish capital’s Exchange District.
Israeli firm Phoenix Insurance is providing 49% of the equity for the purchase of the blocks by Aerium from rival investment manager Invesco.
The deal exchanged on 4 February and is set to complete this week.
The asking price for the adjacent landmark buildings was £60m, a yield of 6.47%. However, the price paid reflects a net initial yield of 6.25%.
Both buildings are let in their entirety to Lloyds Banking Group subsidiary Bank of Scotland, which has a little more than 12 years left on the lease. The annual rent roll is £4.1m. A rent review is due in December 2015.
It is the second Scottish deal for Wells Fargo this week after it teamed up with Santander on a £150m loan for Legal & General’s purchase of the Overgate centre in Dundee.
The banks have provided the fund manager’s UK Property Income Fund II with a seven-year “hunting licence” facility with an all-in cost of borrowing of circa 4.5% for the duration of the loan.
jack.sidders@estatesgazette.com
