Pbb Deutsche Pfandbriefbank (pbb), Aareal and AshbyCapital have jointly underwritten a £90m debt facility to MDM Asset Management and Hana Securities, to refinance Gallagher Shopping Park in the West Midlands.
Located north west of Birmingham at junction 9 of the M6, the out of town retail centre comprises more than 230,000 sq ft of premium retail space and operates at 100% occupancy.
The park was acquired from KKR in 2018 by a Korean real estate fund sponsored by MDM Asset Management and with Hana Securities as the principal LP. The asset is managed by Quadrant.
As part of the refinancing, AshbyCapital has completed its first debt deal, providing a three-year, £20m loan fixed-rate facility. Incumbent senior lenders pbb and Aareal have also extended their existing financing for the asset, with AshbyCapital stepping in to provide a £20m mezzanine and capex facility.
Charles-Etienne Lawrence, investment director at AshbyCapital, said: “Amidst more challenging market conditions than we have seen in recent years, a significant opportunity has presented itself in real estate debt, which is looking increasingly attractive due to revaluations and rising interest rates.
“Using our extensive knowledge of the real estate industry to source the best opportunities with high-quality sponsors, we are delighted to have made our debut with this three-year loan facility which will allow Hana Securities to work through the next stage of this high-performing asset’s lifecycle. Being in a sector that mirrors our equity investment expertise, we are confident in the security of this asset due to its strong fundamentals and resilient income, aided by Quadrant’s experienced asset management.”
Chris Gow, head of debt and structured finance at CBRE, which advised the Korean group on the refinancing, added: “Despite current market conditions and fluctuations in real estate yields, there is still strong debt liquidity for quality assets such as Gallagher Shopping Park. The robust performance of the asset and strong income generation recorded throughout the period of ownership resulted in several offers being brought forward and furthermore, we have been able to structure an attractive facility to ensure our client will benefit from future asset management potential.”
Christopher Daniel, founding partner at Quadrant, said: “We are delighted the incumbent lenders continued to support this asset and to have partnered with Ashby has been a further expression of confidence in the asset and the sponsor’s commitment. Despite the retail headwinds the park has remained relevant and continues to attract both shoppers and retailer interest. We now look forward to working with our partners to continue to enhance the park over the coming years.”
