Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LONDON-Pillar Property, the specialist retail park investor, has refinanced three of its UK retail parks in Edinburgh, Preston and Chester. Existing loans have been replaced with conduit financing, in a £375 million ($545 million) deal with the German mortgage bank HVB.

The three parks covered by the new loan are Fort Kinnaird, Edinburgh; Broughton Park, Chester and the Deepdale Retail Park, Preston, totalling 1.2 million sf between them.

Conduits involve the issuing of bonds secured on the individual properties. Although relatively common in North America, conduits are rarely used in the UK, but according to Pillar’s Finance Director Humphrey price, the method allowed Pillar the flexibility it required.

‘For some time, we have been reviewing various securitisation opportunities for Pillar’s retail park portfolio, but have been deterred by factors such as the cost and relative inflexibility involved with this method of financing,’ explained Price. ‘The deal provides a way for us to achieve a price efficient and flexible alternative to the existing loan funding for some of our parks, without the constraints of securitisation per se.’

The cost of unwinding the existing loans was £13 million ($19 million) but Pillar estimates the new arrangements will save £3 million ($4.35 million) per annum over the initial nine-year term. The loan is capable of being transferred along with the properties, should Pillar choose to inject them into the Hercules Unit Trust which it runs in partnership with Equitable Life.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Fall 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.