M7 Capital provides £12.5 million loan to support the acquisition of Edinburgh office asset

By Bridging Loan Directory 7th February 2023

M7 Capital (“M7C”), a full-service real estate debt specialist, announces that it has provided, on behalf of its UK debt fund TREC II, a £12.5 million loan to VCM Global Asset Management (the “Sponsor”) to support the acquisition of Orchard Brae House in Edinburgh, Scotland.

Orchard Brae House is a multi-let office asset located in the mid-market of Edinburgh, totalling c. 106,000 sq ft, which is 60% let to a mixture of national brands and local businesses.

The project presents the Sponsor with the opportunity to refurbish and let up the vacant space in the building.

The property is managed by VCM Global Asset Management (“VCM”), a specialist purchaser of commercial real estate assets across the UK & Europe with current AUM in excess of £1bn.

Founded in 2010, VCM is a vertically integrated investment platform focused on acquiring and managing alternative assets with investment strategies covering real estate, private equity, and public market alternatives. VCM employs 30+ corporate professionals and has four offices in the Bahamas, Denver, Geneva and Toronto.

M7 Capital has been the internal adviser to M7 Real Estate (“M7”) for all its debt capital market needs since M7 was established in 2009.

In 2016, M7C expanded its operations to incorporate a real estate lending and loan servicing platform.

M7C’s first UK debt fund, TREC II, has now deployed more than £220 million across 23 different loans in line with its strategy of providing loans of up to 70% LTV and from around £5 million and £25 million across the office, retail warehouse, industrial and leisure sectors.

Hugh Fraser, Chief Executive Officer of M7C, said:

“This loan will support VCM in realising its asset management strategy for Orchard Brae House, a high quality and conveniently located office asset close to Edinburgh’s city centre which is already home to a number of strong occupiers.

There is increasing polarisation in the office market with investors and occupiers seeking modern and sustainable spaces with amenities and strong connectivity, and Orchard Brae House is well placed to capture this demand.

We are pleased to be working with VCM on this transaction and to grow our loan book for TREC II.”

Nick Wright, Managing Director of VCM Europe said:

“We believe that there is an opportunity to take advantage of current heightened levels of risk aversion in the UK and relatively favourable pricing for severely supply-restricted submarkets.

M7 understands the real estate and understands VCM’s business plan and has been steadfast in their support during a challenging time in the markets. We look forward to working with them.”