Private equity and real estate debt group EquityBridge Asset Management (EBAM) has arranged a brace of transactions for hospitality investor and developer Union Hanover.
In the first transaction EBAM arranged a £15.5 mln (approx. €18.9 million) consolidated funding package to Union Hanover for it's Black Lion site in Aldgate. This has enabled the developer to repay senior lender Topland, who provided it with acquisition finance to acquire Black Lion House, a 75,000 ft² (approx. 6,970 m²) office block at the edge of the City which Union Hanover is set to convert into a 220-bedroom extended stay hotel.
The financing also enabled Union Hanover to buy out the remaining 47.5% of fellow investors in the project, developer Southern Grove and project and construction management consultancy Rise. Rise will remain project manager on the scheme.
Warren Malschinger managing director and founder of EquityBridge Asset Management said: “The Topland facility's maturity date was the end of July, this combined with liquidity needed for professional fees for the next few months made this an ideal time to restructure the capital stack. This new consolidated loan has lowered the cost of funding and provided more certainty by acquiring 100% of the ownership and capitalising the venture.
EBAM also provided the acquisition finance for Union Hanover’s forward funding of 100 serviced apartments from Barratt Homes London at its Great West Quarter scheme in Brentford, west London, which Union Hanover will operate under its Urban Villa concept, and is expected to begin trading in November.
Malschinger said: “As funding partner for Union Hanover we liked the fact that this transactions counterpart is a FTSE100 company and also that the nature of this deal carries very little development risk. It will allow us to reduce the cost of long term financing at completion by collapsing the bridging loan into an investment facility secured against the trading asset.”
EBAM is currently involved in a number of other real estate fundings including private hospitals and other leasure assets. “The extended stay sector and hostels is of particular interest for us but we will also look at other leisure market opportunities where funding still appears to be relatively scarce compared to other sectors,” Malschinger added.
EquityBridge also announced that its Guernsey based bridging fund, "the Secured Fund" aims to grow its book by adding upwards of £100 million (approx. €121.8 million) over the next twelve months as it continues to attract robust ongoing investment into the fund due to its double digit performance since inception.
Source: MJ2 Limited