One and Two Southbank Place represent the office part of the 1.5 mln sq ft (139,354 m2) mixed-use scheme near Waterloo being carried out by Canary Wharf and Qatari Diar.

Almacantar acquired One and Two for £550 mln (€623 mln) in a forward purchase in 2015. The company let number One to Shell International on a 20-year lease and number Two to WeWork, which has also taken a 20-year lease and has just started fitting out what will be the world’s largest co-working space.

Almacantar finance director Jonathan Paul said the LGIM package replaced a ‘comparatively expensive’ £390 mln (€442 mln) hybrid loan from Cain Hoy.

He said the £420 mln facility is cross-collateralised and provides seven-year money for the Shell building and five-year for WeWork’s offices, at a blended, fixed-rate coupon of between 2.5% and 2.8%.

‘We went to a lot of parties and the appetite was pretty good. LGIM were the most competitive, and fantastic to deal with as well,’ said Paul.

‘We didn’t want to have all the financing in one place at a time; it made more sense to have it staggered. We felt we were more likely to refinance each building individually and we have a view the WeWork creditworthiness covenant will only improve and we are more likely to want to refinance that earlier.’

The loan was made on behalf of LGIM clients including Legal & General Retirement Institutional. Lorna Brown said the transaction was ‘a great fit for our pension fund capital.’

Since joining LGIM to head up real estate debt in January 2018, Brown has steered the platform towards making a number of very large loans, with this the largest so far.

LGIM is thought to have been in the running to finance Goldman Sachs’ 78,000 m2 (840,000 sq ft) new City HQ for NPS, which went instead to Rothesay Life.

This story first appeared in EuroProperty, PropertyEU's sister publication