The UK arm of Hong Kong listed developer Guangzhou R&F Properties has committed to completing the £1 billion One Nine Elms development on the south bank of the Thames in 2023 after securing a £770 million financing.
One Nine Elms will comprise two towers, the 57-storey City Tower, which will have 334 for-sale residential units, and the 42-storey River Tower.
R&F has agreed a £770 million-plus financing package for One Nine Elms that will provide the expected funding necessary for full completion, due in November 2023.
Précis Capital Partners originated the loan and arranged a consortium of lenders with development finance expertise including funds managed by Apollo Global Management, Carlyle’s global credit platform, Crosstree Real Estate Partners and Précis Capital Partners.
The shell and core of both buildings are largely completed with fit-out work to be carried out. The funding will allow lead contractor Multiplex to continue progress on site, with completion for the project set for November 2023.
The River Tower will have a 203-room five-star Park Hyatt hotel and 103 Park Hyatt-branded luxury apartments that will benefit from all the hotel amenities, including a swimming pool, 24-hour concierge, sky lounge and terrace.
It will be the first Park Hyatt Hotel in London and the first Park Hyatt-branded residences. R&F developed the Park Hyatt, Ritz Carlton and Conrad hotels in Guangzhou, China.
The project also includes 57 affordable housing units forward-sold to Thames Valley Housing.
Dr Li Sze Lim, chairman of Guangzhou R&F Properties, said: “R&F is firmly committed to our investments in the United Kingdom, in particular, One Nine Elms to be the new world-class iconic development for London next year.
“The new financing package secured for One Nine Elms under the current financing market backdrop, is testament to the quality of the development and R&F Properties’ ability to deliver these two world-class buildings into the strong London residential and hotel market. The newly established relationship with a world-leading consortium of experienced financiers, is also reflective of their confidence in the execution team to deliver the project to completion.”
Ben Eppley, partner and head of commercial real estate lending in Europe for Apollo, said in a statement: “For the past few years, Apollo has been very active in providing capital solutions to real estate sponsors and owners for their residential properties and other construction projects in London, the broader UK and throughout Europe.
“One Nine Elms represented a compelling opportunity to work with a strong, experienced developer in R&F as part of a sophisticated lender consortium. When One Nine Elms is delivered, it will be a new landmark property in a vital area of London.”
Randeesh Sandhu, CEO and co-founder of Précis Capital, added: "The project will deliver best-in-class high-end units, coupled with a world-class luxury hotel brand and exceptional amenities.”
R&F said it is also making strong progress at the adjacent Thames City in Nine Elms through its continuing development partnership with CC Land. The first residents at this development will move into one of its towers in July.
Both One Nine Elms and Thames City form key elements of London’s Nine Elms regeneration.
There has been speculation that Chinese developer R&F was exiting the UK market after crystallising losses in selling stakes in its projects to pay down indebtedness.
In April it said in a Hong Kong filing that it was selling its 50% stake in Thames City, the redevelopment of the former New Covent Garden Market site, to Bermudan-based group Victory Trend Holdings for around £263.85 million (HK$2.66 billion), or a loss of £186 million.
The sale came after R&F, the Chinese developer founded by billionaire property tycoon Li, confirmed it had sold the nearby Vauxhall Square development in London to Hong Kong-based developer Far East Consortium at a steep loss in March.
Li co-founded R&F Properties in 1994 with Zhang Li in mainland China. The company diversified into hotels in partnership with Marriott, Hyatt and Hilton, and in 2017 made the $3 billion acquisition of 77 hotels from Wanda Group. Li is ranked 39th on Forbes' Hong Kong’s 50 Richest List 2022 and is the largest shareholder in R&F Properties with a 28.4% stake.
The company faces liquidity challenges as a large amount of short-term debt matures in 2022, while its access to funding could remain limited, Fitch Ratings said in a January 14 report.
Kohn Pedersen Fox is architect for One Nine Elms and SOM is architect for Thames City.
The lenders for One Nine Elms were advised on the transaction by Linklaters, Eversheds and White & Case (legal), Dalbergia (construction due diligence), Savills (valuation) and Longevity Partners (ESG). The Borrower was represented by BCLP and Taylor Wessing