Lloyds Bank has funded more than £7.4bn to the UK’s commercial property sector last year, representing an uplift of 8 per cent on 2013.
The total includes real estate financing from both the bank’s SME commercial property portfolio and the Commercial Real Estate teams which provides funding for transactions with a value from £10m and above.
The bank has also continued to increase the scale of its distribution activities by placing debt in the loan and bond markets while also arranging debt on behalf of clients from alternative funding sources such as bonds, US private placements and CMBS transactions
Among the flurry of deals include:
- A sub £100m participation in Intu Properties’ £600m revolving credit facility (RCF), which has an initial margin of 140 bps;
- A circa £50m participation in Great Portland Estate’s £450m RCF, which has a headline margin of 105bps. See full story here;
- Around a £100m participation in British Land’s £785m RCF, with an initial margin of 115 bps. See full story here;
- A £90m commitment in Canary Wharf Group’s (CWC) £360m refinancing of its £1.45bn-valued retail portfolio.
- A £50m participation in CWC’s £200m RCF, initial 150 bps margin, commitment rising to £60m (RCF: £240m) after completion of the Canary Wharf Crossrail mall. See full story here;
- A £72.5m share of a 50:50 split senior and RCF facility, alongside HSBC, for Big Yellow Group. See here for full story and margin breakdown;
- A circa £225m senior loan secured by Quercus Healthcare Property Partnership , the Aviva Investors and Quintain Estates JV. Lloyds has sold £50m to BAWG. Margin was just north of 400bps. See full story here;
- A £380m senior loan to refinance The Yianis Group’s property portfolio;
- a £70m development facility to a Quintain Estates and Keystone joint venture to finance the construction of 475 new homes at Wembley Park. See full story here;
- a £28m senior debt facility to Yorkshire-based developer Dransfield on its Fox Valley and Delderfield developments with new facilities totalling £28m.
This year, Lloyds has financed Ping An Insurance, China’s second largest insurance company, in its second major City of London prime office acquisition, Tower Place, with a five-year senior loan for just above £210m.
Lloyds priced the acquisition finance facility at sub 150 basis points over LIBOR and was expected to sell down a portfolio the debt in the syndication market. See full story here.
John Feeney, managing director and global head of commercial real estate at Lloyds Bank, said: “We are delighted to have significantly increased our level of support to the UK’s commercial real estate sector at a time when the diversity of debt funding options available to borrowers and the competition between bank lenders for major assets and portfolios has rarely been greater.
“The market continues to change rapidly and we are committed to retaining a flexible model that will be able to serve our clients effectively in an increasingly complex funding landscape. Though we retain a conservative risk appetite we see opportunities to further expand our origination activity and balance sheet support once again in 2015.”
Mark Ellis, head of property, SME Banking, added: “The UK’s SME commercial property sector is thriving with the surge in activity seen in the London market over the past few years now spreading out into major regional centres.
“We are committed to retaining our position as a leading debt provider to SME property companies into 2015, supporting their growth and development activities across the country.”
In its annual results last month, Lloyds Banking Group reported a reduction in its combined gross UK and Irish commercial real estate lending by £8bn to just £5.1bn. Irish commercial real estate exposure had fallen by £3.7bn to £1.8bn. In addition, gross exposure to UK commercial real estate lending fell by £4.3bn to £3.3bn.
For the full report of Lloyds remaining run-down, please click here.
Last week, Lloyds announced the further restructuring of its commercial real estate team with the creation of six new specialist teams. The six teams are: listed clients, institutional clients, major private groups, developers, international clients, and private real estate corporates.
For the full breakdown, please click here.