Evans Randall has completed a full refinancing of its senior debt position on its prime retail shopping center, the Königsbau Passagen, in Stuttgart, Germany.
The transaction, which has replaced the existing facility from HSH Nordbank, includes a senior facility from Allianz for €145 million at a fixed rate just on 3.5% per annum and with no amortization for the first two years. European Real Estate Debt II S.à.r.l, advised by DRC Capital has also provided a mezzanine facility of €37.5 million.
Working closely with their shopping center managers ECE, Evans Randall has delivered a substantial enhancement of the asset by the successful completion in August 2013 of a high-end food lounge development on the second floor. This scheme, which was completed on time and on budget, is fully let to a broad range of high quality food concepts. Since the first day of opening, the food lounge has proved to be extremely popular, recording high and sustained visitor numbers. The area is now generating income in excess of €700,000 per annum, equating to circa €14 million in terms of additional capital value.
Kent Gardner, Chief Executive of Evans Randall said: “The successful completion of the recent redevelopment works was a key step in our strategy to create additional value through increasing occupier and consumer appeal. Combined with a robust refinancing deal with leading lenders, this has added to the investment appeal of this prime international asset, providing the means to further drive increases in rental income and capital growth. ”
The banks were chosen following an extensive and proactive market review conducted by Evans Randall of numerous organizations from the UK, Europe and the US which involved traditional and non-traditional lenders including mezzanine providers and leading insurance institutions. Both facilities are for a seven year term, which was a core element of Evans Randall’s strategy, being to take advantage of historically low interest rates and pursue longer term value-enhancing asset management initiatives.
Königsbau Passagen, the largest mall in Stuttgart, comprises 26,000 m² of prime retail space in more than 70 shops, 18,000 m² of prime office space and car parking below the center with 415 spaces. It features a range of more than 70 upmarket retail, dinning and leisure outlets across five floors. Located alongside the historic Königsbau building, built in 1856 and formerly home of the Stuttgart Stock Exchange, Königsbau Passagen is the largest shopping center in Stuttgart, with more than 3.3 million people living in its catchment area.
Source: Evans Randall