Patron Capital has provided a £163m senior whole loan to SevenCitiesLdn to support its £211m strategic repositioning of 123 Victoria Street in Victoria, London.
The £163m facility comprises a £148m acquisition tranche and £15m to fund the refurbishment of 123 Victoria Street, representing 70% loan-to-cost and 59% loan-to-projected value. The first-ranking senior loan has a term of up to four years, with interest paid current from the asset’s income.
The 244,000 sq ft freehold office and retail building, which is located in the heart of Victoria, is fully occupied and has maintained close to full occupancy for the past 12 years.
With ESG improvements having already implemented by the building’s previous owners, SevenCitiesLdn intends to upgrade the building’s communal areas to further enhance the occupier experience and capitalise on rental growth in the Victoria area. The refurbishment will include a new communal business lounge, a substantial terrace, an upgraded reception and enhanced end-of-trip facilities.
This acquisition of 123 Victoria Street forms part of SevenCitiesLdn’s strategy to acquire prime Central London offices with strong fundamentals and clear opportunities to add value and enhance occupier experience.
Henry Randolph, partner, credit at Patron Capital, said: “We’re delighted to support SevenCitiesLdn with the acquisition of 123 Victoria Street, due to both the asset’s fundamentals, the sponsor involved and the management team. Patron Credit aims to lend on assets like 123 Victoria Street, well-located in markets with favourable demand dynamics, and a clear path to creating secure income for the long term.
“SevenCities has an excellent management team who are already ahead of plan at 123. A week after acquiring the building, SevenCities has signed a new retail tenant, submitted all key planning applications, is in negotiations to regear an existing office lease and has progressed the refurbishment design with architect Anomaly.”
Giles Hoare, director at SevenCitiesLdn, added: “123 Victoria Street is a landmark building in Victoria, and we’re excited to deliver our vision for its future. Partnering with Patron Capital has been seamless, and in a market where complex transactions can take an age to complete, both teams worked hard to get this exchanged within eight weeks of formal IC approval. With our strategy centred on larger office transactions, we hope this marks the start of a long and productive relationship with Patron.”
Patron Capital was advised by Hogan Lovells Cadwalader, Addleshaw Goddard and Nexus RE. Seven Capital was advised by Eversheds Sutherland and BCLP. The 123 Victoria Street loan was included in an extension of Patron Capital’s existing loan-on-loan facility with MUFG Bank.
