This Week's London Deal Sheet
The Deal Sheet is a weekly compilation of Greater London and beyond's biggest leases, sales, financing deals, construction updates and personnel moves. Have news you’d like to submit? Email mike.phillips@bisnow.com.
The owners of the giant 67-acre mixed-use development at King’s Cross have secured a £1B loan against the scheme, in spite of the general uncertainty besetting financial and property markets.
The £1B loan was provided by Morgan Stanley, has a five-year term and is secured against a number of the investment assets at the scheme. King’s Cross Central LP said that the financing consolidated a number of individual loans into one debt facility.
The King’s Cross estate achieved carbon neutrality in 2021 and is 100% commercially let to major occupiers including Meta, Google, AstraZeneca, Havas, Universal Music and The Office Group. The recent residential sales launches have proved the most successful in the history of the development, the partnership said.
King’s Cross Central Ltd is 70% owned by AustralianSuper, with the other 30% owned by clients of Federated Hermes and by Argent. Rothschild advised the partnership on the financing.
Sales
Helical has sold the single-asset company Farringdon East (Jersey) Ltd, which owns the long leasehold interest in Kaleidoscope, Lindsey Street, EC1 to Chinachem Group for £159M. The price reflects a capital value of £1,789 per SF and a marginal premium to book value.
The 150-year lease from Transport for London was granted in 2018 and has a head rent geared to 10% of contracted rents.
The six-storey, 89K SF office building sits above the Farringdon East Crossrail Station and is occupied in its entirety by TikTok, the short-form video hosting service owned by Bytedance, which took a 15-year lease in March 2021 at £7.6M a year, an average rent in excess of £86 per SF.
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Quintain, the developer and asset manager behind Wembley Park, has completed the sale of the OVO Arena Wembley to Intermediate Capital Group. The Times reported the price of the deal in July to be about £50M.
The sale forms part of Quintain’s strategy to focus activities going forward on build-to-rent residential across development and asset management.
Built in 1934, the OVO Arena Wembley (formerly Wembley Arena) was purchased by Quintain in 2002 as part of an initial acquisition of 44 acres in Wembley Park. It was transformed by Quintain in 2006 with a £36M refurbishment.
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Chinese developer R&F has bought back a 1.4M SF scheme in Nine Elms after selling it in March. R&F said in a stock market announcement last week it had exercised an option to buy back the Vauxhall Square site put in place when it sold the site to Far East Consortium in March. It sold the site for £96M and bought it back for £106M, meaning Far East made a £10M profit.
At the time R&F said it was selling the site to reduce debt and reallocate capital elsewhere in its business. It said it was buying the mixed-use scheme back because it was confident about its prospects.
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LXi REIT has sold a 65-year “income strip” representing 30% of the annual rental income received from the company's Thorpe Park and Alton Towers assets, operated by Merlin, to M&G for £257M. The deal reflects a net initial yield of 2.96%. The latest book value of the freehold interest in the properties is a 4.25% yield.
The structure comprises LXi selling the freehold in the properties to the buyer, with 999-year leases granted back to the company, pursuant to which the company pays the buyer an annual aggregate rent of £8.2M, reflecting a small proportion of the underlying EBITDA generated by Merlin. The company can acquire the freehold back from the buyer for a nominal price of £1 in year 65, hence the term income strip.
Financing
Alternative property lender Cohort Capital has funded a £70M facility for the acquisition of Lillian Penson Hall, a 100K SF purpose-built student accommodation development in London.
The buyer is LPH Paddington Ltd, a company majority owned by Union Property Developments.
The 313-unit, eight-storey building on Talbot Square in Paddington will serve students of London’s 39 universities. Cohort underwrote, agreed and closed the transaction in 11 days.
Corporate
Savills has completed the acquisition of James A Baker, a specialist adviser in licensed property, for an undisclosed sum.
James A Baker was established by Jim Baker in 2000 with a client list including Star Pubs and Bars, Greene King, Marston’s, Stonegate, Mitchells and Butlers and Punch. The team provides sales and lettings, acquisitions, landlord and tenant representation, asset management and valuation advice.
Comprising a team of nine, directors include Jim Baker and Jack Sinclair as well as associate director Matt Whiteley. They will join Savills' existing licensed leisure team and office network, forming a combined force of more than 25 services and agency professionals in this arena.
Leasing
Canary Wharf Group and Kadans Science Partner have appointed real estate advisory firms Cushman & Wakefield and JLL as leasing agents for the 800K SF commercial laboratory building they intend to develop at Canary Wharf.
The 23-storey building is slated to be delivered in 2026 and will be the largest commercial wet lab-enabled life sciences building in Europe. It will be a laboratory building at its core, with full flexibility allowing lab space on all floors, the developers said.
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Huckletree, the UK and Ireland flexible office operator, is expanding its London presence with a new hub on Oxford Street specifically targeting companies in the Web3 and metaverse sectors. The new site will mark Huckletree’s fifth opening in the capital and grow its footprint to 175K SF.
The 22K SF Jubilee House, owned by Pontegadea, features spaces specifically designed and curated for businesses operating in the Web3 world, including an NFT creator gallery, VR/gaming pods and decompression zones.
Development
M&G Real Estate and development manager CO-RE have announced that work is starting on The Fitzrovia, a new 87K SF mixed-use scheme on Tottenham Court Road, following the appointment of Kier as the main contractor.
The building, which has a gross development value of about £200M, will deliver 66K SF of office space, 11K SF of retail and 10K SF of residential space.
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Bourne Capital has submitted plans for its 372K SF Waterloo Central development opposite Waterloo Station.
Designed by BuckleyGrayYeoman, the all-electric building will feature the UK’s first integrated solar-facade system and is designed to achieve BREEAM Outstanding and WELL Platinum certifications.
