Reading office building refinanced with £65 million loan

Real estate lender Leumi UK and Martley Capital Group have provided the funds to Tristan Capital Partners for the Campus building at Reading International Business Park.

Leumi UK provided a £38 million senior lending facility, while Martley Capital Group, in partnership with Glade Capital, contributed a £27 million mezzanine loan.

This is the third transaction between Leumi UK and Tristan Capital Partners in the past year.

The loans are secured against the high-quality office building, which was acquired by Tristan in December 2020.

The building underwent extensive refurbishment and won the British Council for Offices award for 'Best Refurbished Workplace in South of England and South Wales'.

The Campus building offers 385,416 sq ft of Grade A office space, boasting excellent ESG credentials.

The business plan for the asset is to achieve further new lettings to drive occupancy, capitalising on tenant demand for Grade A space and the diminishing supply due to lack of new development.

Tom Tunley, director of debt capital markets at Martley Capital Group, said: "Closing this transaction prior to Christmas was a brilliant way to end the year for the capital markets team at Martley.

"It deepens our already well-established working relationship with both Tristan and Leumi UK, but also is a signal of intent going into 2025.

"We feel the partnership between the three companies is a perfect blend to enable the continuation of the value-add business plan following the tremendous work done to date by Tristan as well as the strong market fundamentals for high quality out of town offices in the Greater Reading area, a sector we have a high amount of conviction for."

Gez O’Sullivan, relationship director at Leumi UK, said: "This financing is a great example of what differentiates Leumi UK, showcasing our ability to effectively execute a transaction that required close collaboration.

"We pride ourselves on our granular sector-specific expertise and relationship-driven approach, and in Tristan and Martley, we are confident we have the right partners in place.

"There is a lack of quality regional office space in this country so, with its compelling business plan and strong fundamentals, Campus is very well positioned."

The mezzanine loan from Martley Capital Group forms the fourth in the Martley Capital Gap Financing Series, which provides loans for new acquisitions or where borrowers need to refinance upcoming maturities.

Martley Capital has identified a strong pipeline of transactions where it can offer financing solutions in these situations in both the UK and Europe, typically up to 70 per cent LTV.