Ghelamco has lost control of its first UK project after mezzanine lender Tikehau seized control of 225 City Road in London.
The Belgian developer said it lost €64 million on The Arc project.
Ghelamco directors Marie-Julie Mieke Gheysens, Paul Hilaire Gheysens and Philippe Pannier resigned as officers of the project’s special purpose vehicle, 225 City Road Limited, Companies House records show. They were replaced by Tikehau Capital’s investment director Jonathan Fielding and executive director Bart Schenk. The records were filed late September but have not been reported.
Tikehau and Goldman Sachs had provided £175 million of finance for the acquisition and development of 225 City Road, London, EC1, four years ago, where Ghelamco planned to build the Arc, a Grade-A office led mixed-use scheme. Goldman provided £130 million of senior debt that was to mature on 17 July 2023 but could be extended up to 21 months if certain conditions had been met.
The scheme would comprise 150,000 square feet of office space, 100 residential apartments and around 7,500 square feet of retail space. However, the contractor, Henry Construction Projects collapsed into administration project and Ghelamco UK took over the role of general contractor.
The parties could not agree on an exit strategy and Tikehau took control after the loans matured in June 2024. Ghelamco took a €64 million loss and reached a settlement and cooperation agreement with its lenders, "ensuring a smooth transition of the project", said Ghelamco when it reported its financial results for the first half of 2024.
In February, Ghelamco made its second acquisition in the UK capital. There is no indication that the project is in trouble. The developer bought the site of a former candle factory at 100 and 110 York Road for £20 million, according to CoStar data. The developer used two special purpose vehicles 99 York Road Residences Limited and 99 York Road Commercial Limited. Alternative lender Cheyne provided a senior loan for the development of The Hilight, which involves 177 apartments, a fitness and wellness centre, a cinema, sports court and a Skybar on the top.