Brookfield And China Life Plot Refinancing Of £260M London Tower

A joint venture between Brookfield and China Life has received a five-month extension to debt secured against a City fringe office tower while it arranges a longer-term refinancing.

Investors that bought bonds secured against a loan to the 324K SF Aldgate Tower on the eastern edge of the City were told Thursday that an extension to January 2025 had been granted. The loan was originally scheduled to mature on 20 July.

The loans against the building total £192M, £150M of which was securitised and £42M of which was syndicated. The notice to bondholders says that Brookfield and China Life had received a term sheet from new lenders agreeing to refinance the debt at a loan-to-value ratio of 50%.

The building was valued at £260M in July last year, implying that a new loan would total about £130M. The notice says China Life was in the process of receiving approval to put new equity into the deal to secure the refinancing. 

The building is 14.5% vacant and produces rental income of £15.1M. The largest tenant is AECOM, which pays a third of that rent, with a lease expiring in 2031. The weighted average lease length of the building is 6.6 years.

There is interest rate hedging in place, which means the interest cover ratio of the loan is 1.57x.

Brookfield and China Life bought the building for £346M in 2016. It was completed in 2015, having been developed by Aldgate Tower Investments, which was backed by a £200M loan from Starwood Capital. 

In 2021, the pair refinanced a loan used to buy the property with £192M of new debt from Morgan Stanley.