M&G Investments has agreed to loan Goldman Sachs and Greycoat £69.1 million in order to refurbish Procession House, a large office building in the City of London.
The UK investment managers penned the lending agreement on Thursday. The 3-year loan will partly cover refinancing the costs of acquiring the London asset, whilst the rest will go to the necessary refurbishment works.
Goldman Sachs and developer Greycoat acquired the long leasehold of Procession House last year from UK financial services company Legal & General for £68.75 million, at a net initial yield of 6.04%.
Planning permission was granted for a John Robertson Architects-designed refurbishment of the building in 2017.
The joint venture will re-let the property after the refurbishments are finished. This revamp is expected to be completed in early 2020. Planning permission was granted for a John Robertson Architects-designed refurbishment of the building in 2017.
Procession House is made up of over 100,000 square feet of office space, as well as retail space. The building sits above City Thameslink station along the road from St Paul’s cathedral.
Political uncertainty surrounding Brexit has led many to believe that investments in British commercial property could wane, with fears that demand for office space will fall after Britain leaves the European Union. However, there have been numerous examples which suggest many investors still have faith in Britain’s property market, especially in London.
Dan Riches, one of the directors of M&G Investments’ real estate finance team, echoed this sentiment, saying: “The UK, and in particular, London, continues to offer strong relative value and we continue to see a considerable pipeline of opportunities in this space”.