An Investec Real Estate-led club of banks has provided LCN Capital Partners, the New York-based private equity real estate firm, with a £122 million loan for the development of Unilever's new global headquarters in Kingston-upon-Thames, southwest London.
CoStar News revealed in June last year that LCN had completed a £250 million funding deal for Cube Real Estate to develop the 283,000-square-foot office, which Unilever, the multinational consumer goods company, had agreed to prelet in its entirety.
CoStar News revealed LCN was in pole position for the funding in Ma 2021 after JLL had been appointed to advise Cube and the Hathway Opportunity Fund on the investment sale. Knight Frank and DLS Advisors advised LCN.
The development loan represents a 50% loan to value. Alongside Investec’s £43 million commitment, £79 million of debt has been arranged with Allied Irish Bank (GB) and Bahrain-headquartered Bank ABC. The transaction is the largest office development loan in outer London in 2023.
Investec said it reflected its "strong conviction in technology-enabled modern office assets in prime and emerging locations with strong ESG credentials, increasingly focused on individual health and wellbeing".
The Unilever campus is expected to be completed in late 2024 and early 2025. It proposes two interlinking glass-fronted buildings and space for 354 cars and 325 bicycles. The development is targeting a BREEAM Excellent certification and to be carbon net zero in operation.
Investec-arranged club or syndicated real estate financings to date total £950 million.
Hollie Sleigh, Investec Real Estate, said in a statement: “This is our largest club deal since January 2022, demonstrating our growing expertise in arranging larger, £100 million-plus loans and supporting landmark real estate schemes. Leveraging our network of like-minded global banking relationships, combined with our 30-year, through-the-cycle UK lending platform, has enabled us to deliver an innovative solution for LCN."
Ward Stocker, LCN Capital Partners, added: “We are committed to supporting tenants operate the very best real estate, whilst maintaining our position as a long-term investment partner. The tide has changed in real estate and in today’s world, our strategy is focused on delivering next generation real estate.”
New York-based private equity group LCN Capital Partners has been particularly active in Scotland and the North East of England in recent years. It completed the acquisition of Sir Ian Wood House in Altens, Aberdeen for circa £80 million in the largest investment deal in the Granite City in 2019.
It was the third acquisition in the city by LCN and followed the build-to-suit acquisition of the Aker Solutions UK Campus in 2018 and the purchase of the Lloyd's Register building in Prime Four in 2017.
In June 2020 it bought the Sapphire Court office in Coventry for £22 million. In July it bought the Cobalt 22 building on Cobalt Business Park in North Tyneside for £18.3 million. The group subsequently bought the neighbouring Cobalt 23 for £26.2 million.
In February 2021 it moved south with the acquisition of BT Group's new headquarters in Bristol for £135 million, or a 4.6% yield.
LCN has offices in Amsterdam, London and Luxembourg.