Kiwoom Securities and Hana Securities have secured a £46m loan from Deutsche Hypo to refinance Cannon Green in the City of London.

The 110,000 sq ft grade A office building was bought from Ocubis for £120m in 2018, reflecting a net initial yield of around 5%.

Kiwoom appointed Quadrant to manage the asset late last year as it sought to ensure the space continued to appeal to occupiers in the City. Shortly before the UK entered its first lockdown, Kiwoom attempted to sell the office for around £140m, having already syndicated an equity stake in Seoul. The asset manager successfully sold down around 30% of the equity to Police Mutual Aid Association, a $2bn pension fund for South Korean police force members.

The three-year, interest-only debt facility was arranged by CBRE.

John Hardie, senior director, debt and structured finance at CBRE, said: “Despite ongoing pessimism about the state of the office market, this deal is testament to the fact that liquidity and appetite to lend exists for good quality assets with strong income profiles." 

“Lenders are being more conservative and lending terms have tightened but we have seen a positive shift in sentiment since the start of the year and competitive financing is there to be deployed.”

Christopher Daniel, founding partner of Quadrant, added: “We were delighted to have assisted in managing this successful project, working with the other advisers and providing the lender comfort a credible business plan existed to ensure the continued relevance of the asset and strength of the ongoing income.”

Tricky time for office refinancings

Office refinancings have proven tricky in recent months, with debt difficult to come by for all but the most prime of assets. Oxford Properties and Temasek secured a £280m loan from United Overseas Bank and Maybank for the Blue
Fin building, another prime central London asset. Meanwhile, Argyll secured around £200m of debt from Aareal in August.

At the same time, other assets have struggled. 1 Poultry, another Korean-owned asset, struggled to find buyers after its lender turned down the opportunity to refinance the WeWork-occupied asset. In Dublin, receivers took control of an office owned by Oaktree, Nama and Bennett Construction after a €120m Pimco loan expired without a refinance or
sale in place. Meanwhile, receivers were recently appointed for 2 Dublin Landings, owned by South Korean real estate fund manager JR AMC.