£45m bridge loan enables sale of Manchester Corn Exchange
Manchester’s Corn Exchange has been sold by Aviva, for an undisclosed sum, to a private investor understood to be from the Middle East.
The iconic property was marketed last year for around £43m.
London-based specialist lender, Cohort Capital, financed the purchase with a £45m bridge loan.
The £45m bridge facility was secured against the 141,000 sq ft, Grade II-listed building, as well as a portfolio of other mixed-use UK assets.
Westfort Advisers advised the buyer.
The market-clearing, short-term facility allowed the buyer to leverage their investment at very short notice, affording them the flexibility to procure senior, term-loan financing in 2023.
Built between 1896-1903 and most recently redeveloped in 2017, The Corn Exchange is an iconic former market hall in the heart of Manchester’s city centre, comprising a restaurant and leisure venue on the ground, lower ground and first floors, and an aparthotel on the upper floors.
The property has 18 leases with an average lease term of 17 years and, while largely stabilised, still offers some scope for improving occupancy and tenant mix to further enhance value.
Matt Thame, founder of Cohort Capital, said: “It’s been an eventful year for the private debt markets. But we have definitely seen an increase in situations where lenders have not performed on their initial debt terms.
“With this deal, we were able to deliver with certainty and speed – which in the current market goes a long way, especially with acquisition opportunities which have real deadlines attached.
“Having a reputable introducer and advisor like Westfort assisting with the closing process made the underwrite much more straightforward. Now the ‘Goldilocks’ period of low inflation, rates and growing assets prices has come to an end, having an experienced debt advisor who introduces quality business but also exits existing loans to term debt couldn’t be more important – for lenders and borrowers alike.”
Richard Herring, co-founder at Westfort Advisors, said: “This is a fantastic outcome for the investor but also for Cohort, both of whom managed to weather some severe headwinds – not least September’s mini-budget – while managing to remain pragmatic and flexible throughout the process.
“Key to the deal’s success was the diversity of the collateral package, the quality of the Corn Exchange, and the calibre of the sponsor.
“Special thanks should be paid to our legal advisors at Farrer & Co and to Matt Thame at Cohort, who were instrumental in getting the deal across the line.”
Deepak Drubhra, co-founder at Westfort Advisors, said: “We are delighted to have arranged this facility with Cohort Capital, which has enabled our client to secure one of Manchester’s most notable restaurant and hospitality destinations.
“All parties involved have worked tirelessly to complete this transaction in a tight timeframe during a turbulent economic climate and we look forward to shortly engaging with senior lenders to arrange a term loan facility.”
