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AustralianSuper and TH Real Estate finance One Crown Place
AustralianSuper, the AUD 140 billion Australian pension fund, has teamed up with their long-standing advisor, TH Real Estate, to jointly finance One Crown Place in London’s EC2 with a £280 million development facility.
AustralianSuper has committed £230 million and TH Real Estate’s recently launched debt mandate is participating with a £50 million commitment.
The mixed-use scheme, developed by Malaysian conglomerate MTD Group, totals 370,500 sq ft and is comprised of 136,000 sq ft of office space, 7,000 sq ft of retail, a 41-bed boutique hotel and 246 luxury residential units. CBRE is acting as Development Manager on behalf of MTD Group.
Henry Robinson, Senior Director, CBRE Development comments: "We are delighted to be working in partnership with AustralianSuper and TH Real Estate for the financing of our flagship development at One Crown Place. The transaction was executed efficiently and knowledgeably by the lenders from start to finish and having the CBRE debt team advise on the funding terms provided us with the necessary flexibility for the requirements of our client."
MTD Group is an infrastructure-based group, established in 1993 and headquartered in Kuala Lumpur, Malaysia. Its principal business activities range from civil engineering & construction to real estate & property development. MTD Group entered the U.K. development market in 2013 with the acquisition of their strategic landmark property, One Crown Place.
CBRE Capital Advisors debt and structured finance team, led by Steve Williamson, arranged and structured the transaction for MTD Group.
Mr Tee, Kim Siew, CEO of MTD Group says: "We are very pleased with the outcome of this transaction and the efficient and successful collaboration between multiple stakeholders across the globe. This is a great milestone for us and we are extremely proud of our team that delivered this result to build relationships with our new partners TH Real Estate and AustralianSuper."
The loan marks AustralianSuper’s first commercial real estate (CRE) debt investment in the U.K. and follows the launch of a recently agreed mandate with TH Real Estate to expand their investment strategy into U.K. and European CRE debt. The CRE debt mandate is in addition to the direct European office and retail sector equity mandate agreed between the two parties at the beginning of 2018.
Jason Peasley, Head of Mid Risk at AustralianSuper, adds: "The One Crown Place transaction strongly aligns with our real estate debt strategy to target high quality opportunities secured against institutional assets in top-tier locations in European cities. Expanding our relationship with TH Real Estate – which has an impressive track record in the European debt sector – allows us to partner with a market leading global manager to access high quality real estate opportunities."
AustralianSuper’s CRE debt mandate is targeting debt financing opportunities in London and other major European cities with a focus on both mezzanine and development/refurbishment opportunities for investments in excess of £100m.
Shawn Kaufman, Director at TH Real Estate, comments: "We are pleased to be at the forefront of the market in providing CBRE and their client with a single financing solution for the One Crown Place development and believe this transaction demonstrates the combined strength of TH Real Estate and AustralianSuper. As part of the now formalised debt mandate, together we are able to implement an investment strategy that is both meaningful and relevant to borrowers in the current environment."
AustralianSuper is Australia’s largest pension fund and currently manages more than AUD2.4bn in the direct credit portfolio together with over AUD 10bn in the property equity portfolio. TH Real Estate has $3.3 billion of CRE debt-related AUM in Europe. In 2014, they successfully launched their first £300 million U.K. debt mandate, which was followed-up by a second U.K. debt mandate totalling £500 million, with a number of separate accounts managed on behalf of various other third-party investors.
Note: TH Real Estate renamed to Nuveen Real Estate in January 2019.Issued by Nuveen Real Estate Management Limited, 201 Bishopsgate, EC2M 3BN. Authorised and regulated by the Financial Conduct Authority. TH Real Estate is a name under which Nuveen Real Estate Management Limited provides investment products and services. TH Real Estate is a real estate investment management holding company owned by Teachers Insurance and Annuity Association of America (TIAA). TH Real Estate securities products distributed in North America are advised by UK regulated subsidiaries or Nuveen Alternatives Advisors LLC a registered investment advisor and wholly owned subsidiary of TIAA, and distributed by Nuveen Securities, LLC, member FINRA. The target return above is derived from both quantitative and qualitative factors, including historical returns and market conditions and assumptions (including but not limited to occupancy rates, market conditions, cap rates and availability of financing). The Fund’s target return is presented to establish a benchmark for future evaluation of the Fund’s performance, to provide a measure to assist in assessing the Fund’s anticipated risk and reward characteristics and to facilitate comparisons with other investments. Any target data or other forecasts contained herein are based upon subjective estimates and assumptions; if any of the assumptions used do not prove to be true, results may vary substantially. The target return is pre-tax and is after fees and expenses. In any given year, there may be significant variation from these targets, and the General Partner makes no guarantee that the Fund will be able to achieve the target return in the long term. This fund involves a risk of capital loss.