Canary Wharf Group has completed a £610 million loan secured against its Docklands estate's retail portfolio in London, with clients and funds managed by Apollo.
The financing will repay bonds due in April 2025 and April 2026. The whole loan is secured in tranches against the majority of the group's 1.2. million-square-foot retail portfolio, which is 97% occupied. The group is owned jointly by Brookfield and the Qatar Investment Authority.
The loan is for a five-year term and has been made via Apollo's European Real Estate Credit platform. The franchise is focused on performing CRE lending. Apollo has been active through the franchise this year in the UK, providing a £393 million, five-year loan to manager BGO secured by six UK logistics schemes in August.
Ramzi Kattan, Senior Credit Officer at Moody’s Ratings, said of the transaction: “Canary Wharf's move from public to private refinancing resulted in securing higher leverage than what is available in the unsecured public bond market. Overall, the increased availability of private credit, along with the ability to swiftly execute large transactions, lessens the refinancing risk within the real estate sector.”
In the last 12 months CWG has completed more than £2 billion of refinancings which it said demonstrated the quality of its asset base and opportunities for growth, as well as strong support from lenders.
The group added that it has repositioned its balance sheet so that there are no material refinancings until 2028 and no significant office refinancing requirements until late 2029. The refinancings break down as:
- £564 million secured on 1-5 Bank Street, home to Société Générale and the European Bank of Reconstruction and Development. Loan extended until November 2029.
- £132 million secured on 15 & 20 Water Street – part of Wood Wharf, a cultural, leisure, retail and residential mixed-used environment expanding to the east of Canary Wharf which includes Broadwick Live, The CUBE, TRIBE Hotel, Dishoom, Patty & Bun and Third Space as well as the London Innovation Centre developed with Kadans Science Partner.
- £341 million secured on 25 Churchill Place, extending the loan until July 2030 on the office building let to EY and European Medicines Agency until 2040 and 2039 respectively.
- A loan of £80 million for the construction of two new serviced apartment buildings offering short and medium stays in the Wharf for the first time at 3 & 15 West Lane.
- £76 million of additional loan secured for One Churchill Place, together with extending the existing £390 million loan to 2039 alongside Barclays lease extension to that date, with Barclays investing in its UK headquarters.
Last month Brookfield committed £900 million in equity to help refinance Canary Wharf’s debts. The move was aimed at helping Canary Wharf Group raise the £610 million of new debt secured by its shopping centre complex to refinance upcoming bond maturities. Brookfield will commit the equity via an equity commitment letter, which can help repay the senior secured notes.
Becky Worthington, chief finance officer for Canary Wharf Group, said in a statement: "We have achieved a significant amount of financing over the last 12 months and this latest deal with Apollo is testament to the strength of the proposition and our performance at Canary Wharf. We are pleased that Apollo could provide a bespoke solution to address both near and medium-term maturities, which speaks to the quality of our portfolio and supports the stability and long-term nature of our capital structure.
"We continue to attract new businesses to the Wharf including health, life sciences, education, VC start-ups and scale-up customers. Several customers have recommitted including Barclays, Morgan Stanley, Citibank and JP Morgan, and earlier this year, Revolut chose Canary Wharf as its global headquarters.
“Canary Wharf is a thriving mixed-use neighbourhood with more than 3,500 people now living here and that figure is set to double over the next two years. Our retail, leisure and hospitality offer continues to grow with an ecosystem that includes childcare and schooling, universities, hotels, gyms and health centres."
Ben Eppley, partner and head of real estate credit for Europe at Apollo added: “We are pleased to provide a scaled financing to Canary Wharf Group, secured against one of London’s premier shopping and leisure destinations. Our ability to transact in size and provide a tailored solution we think demonstrates why leading developers and real estate owners like CWG choose to partner with Apollo’s Real Estate Credit business.”
Canary Wharf is home to more than 320 shops, over 80 bars, cafes and restaurants as well as eight grocery stores, pharmacies, health clubs and a school in addition to 16.5 acres of green and blue spaces including the recently launched Eden Dock.
In November, ratings agency Moody's joined a number of leading corporates such as HSBC and Clifford Chance in reducing its office space at the Canary Wharf estate, relocating from six floors at One Canada Square to offices in the City.
Other financial institutions such as Morgan Stanley and Revolut have committed to Canary Wharf recently, while there are plans for a major repurposing drive at the estate to diversify the tenant mix.
In July Qatar Investment Authority and Canary Wharf Group unveiled the first iteration of their plans to redevelop 8 Canada Square, the giant office tower vacated by HSBC at the Docklands financial district.
The 1.1 million-square-foot tower is fully owned by QIA, while CWG is the development partner. The parties said the redevelopment is the world's "largest transformation of an HQ office tower into a sustainable mixed-use building".
In November, Canary Wharf Group said it had let 65,000 square feet of space to leisure and entertainment investor Imbiba to open a 78-bed hotel, restaurant and music venue at 12 Bank Street.
For a recent interview with the developer about how it is responding to changing occupier demands, click here.
Apollo's European real estate credit platform has lent €4.2 billion in 2024 to the end of the third quarter. The loan book at the end of the third quarter is €11 billion and this includes €3 billion of refinancing and €1.2 billion of acquisition financing. It included €300 million of mezzanine.
Key deals alongside the £393 million, five-year loan to manager BGO secured by six UK logistics schemes in August include in September, an €150 million senior loan, as part of a €250 million whole loan, to Fort Partners, Hillspire, Four Seasons and DeA Capital to redevelop the Palazzo Marini in Rome into a Four Seasons hotel.
In August, it provided a £118 million, five-year senior loan to Stepstone, PGIM and Elevation for the acquisition of six premium care homes in Greater London.
In October, it provided half of a €801 million loan to Ares and Sunrise Real Estate for a pan-European logistics portfolio.