Cain International, the privately held investment firm, and affiliates of Starwood Capital Group, the global private investment firm, have agreed a £535 million loan to Docklands developer Canary Wharf for the next phase of development at its Wood Wharf residential scheme.
Cain and Starwood Capital will each provide half of the £535 million development loan, one of the largest in the UK in the past 12 months.
Part of the wider Canary Wharf estate, Wood Wharf Phase Three is a 1,308-home private build-to-rent scheme, split across three towers and two buildings, alongside 26,300 square feet of commercial. The phase includes 295 affordable homes.
The scheme is part of the Brookfield and Qatar-owned Docklands developer's repositioning of its estate to offer a mix of housing, offices shopping and leisure. Wood Wharf is expected to include 3,600 homes in addition to nine acres of public spaces, a GP surgery and a school. Its estimated completion is in phases from end of 2025 to the first quarter of 2027.
Graham Keable, managing director – real estate debt at Cain International, said the financing was an opportunity to deepen an existing relationship with an experienced sponsor while increasing its exposure to a market sector it has "comprehensive experience".
Harvey Sandhu, vice-president, real estate debt, Starwood Capital, said Canary Wharf has become a vibrant, mixed-use destination and Wood Wharf Phase 3 will enhance this transition.
Becky Worthington, CFO, Canary Wharf Group, said: “This financing agreement is testament to the success of our residential offering at CWG and the strength of our lender relationships."
The transaction will see the asset transferred at "full market value" up the group structure out of the bond group, in a move that reduces development risk within Canary Wharf Group Investment Holdings.
The market value is £241 million, a slight gain on the last appraised value of £237 million. The phase represents 3% of the total assets of CWGIH and its subsidiaries. The money will be raised to repay around £160 million of debt and for operational uses.
Wood Wharf Phase 3 will be delivered with a target Level 4 Code for Sustainable Homes across the private market properties, and BREEAM Excellent on the commercial space.
Canary Wharf Group is owned jointly by Brookfield Property Partners and Qatar Investment Authority and develops, manages, and owns interests in approximately 9 million square feet of mixed-use space and over 1,100 build to rent apartments, principally at its Docklands development.