Greystar and Henderson Park have financed their development of the world’s tallest towers to be built using modular construction with German bank Helaba.
The twin towers, 44 and 38 storeys high, are being built in Croydon in London and will provide 546 multifamily apartments for rent. Helaba has not previously financed a large rental residential development in the UK but it has funded residential construction for Greystar in the US, as well as multifamily schemes in Germany.
It is thought all parties are keen to invest together in future. In Croydon, the bank is believed to be providing a £140 mln (€157 mln), five-year facility with a two-year extension option.
The loan-to-cost is thought to be circa 65%, suggesting the construction costs for the project are about £220 mln (€247 mln). US residential rental specialist Greystar and private equity firm Henderson Park acquired the 135-metre-high development at 101 George Street from Tide Construction in January in their second joint venture in the London private rented sector together.
The site is next to a fast connection station into London. Work on the towers’ cores began three months ago and is being carried out by Tide & Vision Modular. The project will be delivered within 24 months, with nearly 1,500 modules transported to the site from Tide’s factory in Bedford.
Architect HTA says most of the fit-out, including electrics and plumbing, is installed offsite before transportation, creating value for the investors because the apartments can be rented out earlier than if they were built using conventional methods.
Helaba’s lending in the UK in 2018 is expected to be between £400-£500 mln (€449-€562 mln), a similar level to last year. The bank has just provided half of a £165.2 mln (€185.6 mln) loan alongside NatWest secured on the 1 million sq ft (92,900 m2) Highcross shopping mall in Leicester, for Hammerson and Japanese bank Norinchukin.
Last week Helaba refinanced the Wars Sawa Junior shopping centre in Warsaw for Atrium European Real Estate with a €170 mln, eight-year facility, replacing a bridge loan taken out two months ago when Atrium bought the mall for €301.5 mln.