Bruntwood lines up £120m loan

PROPERTY group Bruntwood has agreed a £120m, 10-year loan with Legal & General Investment Management.

It allows the Manchester-based company, which has a number of assets in Yorkshire, to cut the cost of some of its debt by refinancing part of the £440m of Commercial Mortgage Backed Securities (CMBS) which were initially arranged through RBS in 2007.

The latest facility, at 65% loan-to-value, is at a fixed rate of 4.64% – 0.5% cheaper than the CMBS deal.

It is secured against seven Bruntwood buildings including City Tower, the 28-storey block at Piccadilly which is also its headquarters.

Figures from last year’s accounts show Bruntwood has total debts of around £605m which represents 62.6% of its fixed asset base of £966m.

Chief executive Chris Oglesby said: “Securing this new, long term facility with a lender like Legal & General is testament to the strength of our successful business model and allows us to part refinance our CMBS as well as to position ourselves for future growth.”

He added: “Bruntwood owns over a fifth of Manchester’s city centre office space, as well as a number of other key regional locations in the North of England and Birmingham, and we believe that our growth will continue to come from careful stock selection and incredibly hands on asset management.”

The transaction represents L&G’s second real estate debt financing deal, following a £121m loan which was agreed to student accommodation developer UNITE Group.

Graham Rouse, commercial real estate lending manager at Legal & General, said: “Another significant and sizeable deal, this is the successful conclusion of several months’ close discussions and yet again demonstrates our ability to take a more adaptable and innovative approach to lending.”