GRE Finance agrees £14.9m loan against City fringe office

By Bridging Loan Directory 26th February 2024

GRE Finance, a specialist lender to the UK real estate market, has agreed a £14.9m loan for Riverside Capital, a Jersey-based £1.4bn UK real estate investment fund, against Old Street Works, an office complex on the northern fringes of the City of London.

Located on City Road, Old Street Works comprises 34,000 sq ft in three interconnected buildings with office accommodation on the first to fourth floors and retail on the ground and basement floors. The building is let to 10 tenants and is 78% occupied.

The 24-month loan is secured against the freehold of the buildings, and is being used to fund refurbishment works on the vacant units, including through improved lighting, flooring and further cosmetic changes.

The deal marks the latest loan that GRE Finance has secured against offices in London, including the Farringdon and Covent Garden submarkets, in addition to strong regional locations. In the past three years, GRE Finance has provided £160 million in financing for borrowers against the asset class.

The deal closely follows that of GRE Finance’s appointment of associate directors Clare Grimes and Archie Dickinson, from Octopus Real Estate and Hilltop Credit Partners respectively, as the specialist lender seeks to capitalise on the surge of opportunities in the real estate finance market.

Daniel Benton, director at GRE Finance, said:

“Given our decades of experience in real estate and finance, we were able to recognise the potential in this great value-add opportunity in one of London’s hottest office sub-markets with an experienced sponsor.

With an expanding loan book of £120 million secured against residential and commercial property across the UK, we have deep conviction in sectors with good fundamentals, which includes operational residential real estate classes such as purpose-built student accommodation and later living.

We are actively seeking opportunities with borrowers looking for a true partner in their lender.”

Clare Grimes, associate director at GRE Finance, said:

“Properties like Old Street Works – offices in excellent locations with strong value-add potential – are among the kinds of assets that most appeal to us.

That’s particularly the case when there is opportunity to enhance value through planning.

As the market increasingly looks likely to settle, we anticipate more borrowers seeking financing from lenders willing to take on a share of the risk, representing a positive approach to real estate which we believe we are well placed to deliver on.”

Nicholas Kelliher, transaction lead at Riverside Capital, said:

“The successful refinancing with GRE is testament to the success of our ongoing business plan initiatives at Old Street Works, and facilitates a renewed opportunity to enhance value as we look to conclude a multi-year revitalisation and repositioning of the building.

In light of recent headwinds, we are delighted to partner with a lender that understands the potential for growth in the London office sector, aligning with our strategy to stabilise the portfolio and continue delivering high-quality product as the market turns its focus to recovery.”