Refinancing deal secures future of The Mailbox
The Mailbox has been refinanced ending the proposed sale of one of Birmingham’s landmark buildings.
Asset manager Martley Capital Group secured £90m of new debt and was provided £65m by specialist lender Leumi UK. Mailbox REIT has issued a loan note which fills the remaining finance gap.
A senior facility and loan note also means that Deutsche Bank will be paid a chunk of its outstanding debt, believed to be around £100m.
Its loan-to-value (LTV) ratio soared to 69.1% – well above the agreed covenant of 60%.
“The outward yield shift for regional office assets in the current market largely due to the prevailing interest rate turbulence” was blamed for the breach.
JLL had been appointed to put The Mailbox on the market after a challenging period where dividends were suspended and its value dropped.
Comprising 1.07m sq ft of space, the Birmingham landmark building was looking for bids in excess of £120m, with SevenCapital reported to be in the running at the time.
Dan Boakes, managing director of debt capital markets at Martley Capital Group said: “The Mailbox in Birmingham is a key cornerstone of our portfolio, and we needed a lender who could not only navigate the complexities of this deal but exceed our expectations. Leumi UK demonstrated exceptional agility and efficiency. The speed and precision with which the team delivered, completing full credit approval in under three weeks, were commendable.
“Leumi UK’s proactive approach was instrumental in ensuring the success of this transaction. Their ability to provide tailored solutions in a challenging market environment has set a new standard.”
Oliver Stenning, relationship director at Leumi UK said: “We are delighted to complete our debut transaction with Martley Capital Group, enabling the recapitalisation of The Mailbox, a significant mixed-use asset in Birmingham city centre.
“This deal required an entrepreneurial approach and demonstrates Leumi’s conviction to backing buildings with strong fundamentals and sponsorship, regardless of the asset class. The execution was efficient thanks to the quality of the borrower and our advisors and we are excited to develop our relationship with Martley as they continue to expand their platform.”
