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M&G Investments backs Lodha's Grosvenor Square scheme with £517m loan

By Kasmira Jefford - Tuesday, October 10, 2017 11:05

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M&G Investments has agreed to back Lodha UK for the development of its flagship scheme at No. 1 Grosvenor Square, by providing a £517m whole loan.

The landmark property, which was previously home to Canadian High Commission, is being redeveloped into a luxury residential scheme with 48 homes.

Lodha purchased the site in 2014 and in 2015 Westminster City Council granted consent for its complete redevelopment.

Grosvenor Square is undergoing a period of significant changes. In addition to the development by Lodha, Rosewood has recently been announced as the hotel operator for the redevelopment of the former US Embassy at the western end of the square.

The loan, will be invested and held by funds managed by M&G, is one of the biggest loans from a single provider for a UK residential project.

Dan Riches, Director, Real Estate Finance, M&G Investments, said: “We have worked extremely closely with Lodha over the past 12 months to ensure the delivery of the development of this historic site in central London. Lodha has proven to be a highly capable counterpart with deep understanding of this market and has assembled a top tier project team for the development of No. 1 Grosvenor Square.

“M&G’s direct origination model gives our institutional investors direct access to prime real estate such as No. 1 Grosvenor Square. Our unique ability to invest and hold large loans on the most complex of transactions has proven extremely attractive to borrowers and provides us with more opportunities to create value for our investors.

“Private credit investments have become increasingly sought after by institutional investors seeking higher returns than are available in more liquid markets."

Ab Shome, Director of Finance, Lodha UK, said: “We are delighted to be supported by M&G Investments to fund the delivery of this unique development. M&G’s size, stability and long-term outlook make them the perfect funding partner for such a significant and prestigious project.”

Gabriel York, Co-Head of Lodha UK, added: “M&G’s backing is a significant endorsement of our Grosvenor Square project and marks a major milestone in the growth of our UK business.”

 The entire loan will be invested and held by funds managed by M&G.

M&G’s Real Estate Finance team has invested over £7bn in commercial mortgages in the UK and Europe and is one of the largest new lenders to emerge since the 2008 global financial crisis.

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