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TH Real Estate to refinance £1.1bn UK portfolio


TH Real Estate has instructed Eastdil Secured to help refinance the seven core UK properties in its Cityhold Office Partnership, valued at nearly £1.1bn.

Cityhold Office Partnership is a €2.2bn pan-European office joint venture vehicle between US institution TIAA-CREF and Sweden’s AP1 & AP2.

The UK super-prime property portfolio, valued at around £1.085bn, comprises six built assets and one development site, all in London totalling 1.35m sq ft. They are:

  • The 332,448 sq ft ‘Can of Ham’ development site at 60-70 St Mary Axe, EC3
  • The Peak Victoria, SW1, bought by Cityhold Property from Heron International in December 2012 for £113m – 5%.
  • Belgrave House, SW1, bought for £108m in 2011 in a 50:50 joint venture with Grosvenor.
  • One Kingdom Street, W2, bought as Cityhold’s debut acquisition in London for £230m in December 2011, reflecting a yield of 6%.
  • 60 Great Portland Street, W1, Great Portland Estates’ former owned headquarters which TH Real Estate bought in January this year for £102.1m, reflecting a 3.89% yield.
  • 12-14 New Fetter Lane, EC4, a 151-year lease in which was sold to TH Real Estate for £165.8m in November 2014, reflecting a 4.5% yield. The building is law firm Bird & Bird’s new London headquarters.
  • 40 Holborn Viaduct, EC1, bought by Cityhold in August 2012 for £141.5m – a 5.25% yield.

It is understood that TH Real Estate is looking for a Loan to Value ratio of 50%, so would require around £542m of debt. The other properties in the portfolio, not up for refinance, are located in Germany and France.

TH Real Estate secured a €231m bridging loan in September last year on behalf of the Cityhold Office Partnership. The 18-month facility was provided by ING, an existing lender for TH Real Estate throughout Europe, on competitive terms. The debt facility was allocated over six of the existing assets.

Financial services provider TIAA-CREF and the Swedish National Pension Funds AP1 and AP2 combined forces in August last year to create the pan-European office investment platform.

TIAA-CREF’s affiliate, TH Real Estate, brought the parties together and has been managing the vehicle on the investors’ behalf, providing investment and asset management services.

The joint venture was seeded with existing properties owned by the TIAA General Account, AP1 and AP2, creating an initial platform valued at €2.2bn.

The venture has also undertaken an active investment program with new capital from the TIAA General Account, AP1 and AP2 targeting an additional €2bn of investment in its initial three years.

The JV is primarily targeting ‘core’ investments in Tier 1 cities such as London, Paris, Munich, Hamburg, Frankfurt and Berlin. Additionally, the investment program will invest in ‘value-add’ opportunities such as leasing, renovation and development opportunities in Tier 1 cites, or stabilised core investments within Tier 2 cities that include Madrid, Milan and Amsterdam, among others.

TH Real Estate declined to comment.

Original Article – http://news.costar.co.uk//en/assets/news/2016/July/TH-Real-Estate-to-refinance-11bn-UK-portfolio/?utm_source=CoStar%20Daily%20News&utm_medium=email&utm_campaign=7315386_11.07.2016%20-%20prospects&dm_i=UQT,4CSL6,4BR16E,FZ84J,1