Terrace Hill Group plc (AIM: THG), a leading UK property development and investment company, has announced that it has completed a £27.45 million (approx. €28.96 mln.) refinancing with Alliance & Leicester of its 129 Wilton Road asset in London, SW1.
The investment facility replaces the previous development funding provided by Hypo Real Estate and allows Terrace Hill to take advantage of the reduction in medium term interest rates and secure its funding at historically low levels. The new funding arrangement allows conservative gearing of up to 50% LTV on a high quality, prime office asset with a maturity of date of January 2011.
More than 22,000 ft² (approx. 2,000 m²) of 129 Wilton Road is already occupied, with three of eight floors let to leading energy company E.ON, on a 10-year lease at rents ranging between £68.50-72.50/ft.². Pret a Manger occupies 2,179 ft² of retail space on the ground floor on a 15-year-lease, which produces an annual rent of £100,000 (£82.09/ft² zone A).
Commenting on the agreement of the new facility, Philip Leech, Chief Executive of Terrace Hill, said: "Completing this refinancing arrangement with historically low interest rates, particularly in the current market environment, is a strong endorsement of both the quality of the building and Terrace Hill's asset management strategy and, allied to the strong brands we have already attracted to the building, demonstrates Alliance and Leicester's confidence in the potential benefits that can be unlocked going forward.
"We very much hope that this agreement with Alliance & Leicester marks the beginning of a successful partnership through which we can use our respective expertise to create value in the long term."
Ian Ward, Senior Manager, Commercial Property Finance at Alliance & Leicester, added: "129 Wilton Road offers a compelling combination of high quality space in a strong location and Terrace Hill's asset management strategy has already demonstrated that it can attract secure and high profile covenants to the building.
"Against a challenging market backdrop, Alliance & Leicester, part of the Santander Group, is well placed to partner on schemes such as 129 Wilton Road and we look forward to working with Terrace Hill to enhance the asset further and position it to attract additional tenants in the future, together with benefiting from the expertise that can be shared between us, leveraging this new relationship for further deals in the future."