The loan was provided to a joint venture between Goldman Sachs and Greycoat (the sponsors).
Some of it will be used to cover the refinancing costs of acquiring the property, with the remainder funding the refurbishment works.
Procession House (pictured above) comprises over 100,000 sq ft of office and retail space on top of the City Thameslink station, and is a short walk from Farringdon, London Blackfriars and St. Paul’s.
Planning permission is already in place, with the refurbishment — which is underway — scheduled for completion by early 2020.
“We continue to see strong demand for central London office space, and this property will provide sought-after, high-quality offices for businesses in a desirable location, with great connectivity and local amenities,” said Dan Riches, director of real estate finance at M&G Investments.
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The entire loan, which has a term of three years, was invested and held by funds managed by M&G Investments.
“The strong sponsorship and combination of institutional capital, a best-in-class operating partner and experienced project team, along with strong underlying fundamentals in this sub-market made Procession House a compelling lending opportunity,” added Dan.
“Following an active 2018, during which we committed to over £1.2bn of investments across Europe, our institutional investors continue to seek exposure to commercial real estate debt in order to achieve attractive risk-adjusted returns.
“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.”
M&G’s real estate finance team has invested over £8.3bn in commercial mortgages (as of 31st December 2018) in the UK and Europe.