Milton Park secures a £200m refinancing
Aug 02, 2018
Hermes Investment Management, the £33.6 billion manager, and Canada Pension Plan Investment Board (CPPIB), a professional investment management organisation that invests on behalf of 20 million Canada Pension Plan contributors and beneficiaries, have refinanced the existing facility secured on Milton Park, their jointly owned Science and Business Park in Oxfordshire. The new seven year £200 million fixed rate mortgage loan has been provided by Barings Real Estate, part of Barings LLC (Barings), one of the world’s largest diversified real estate investment managers, on behalf of an institutional investor.
Located in the Thames Valley region of the U.K., Milton Park accommodates leading global science and technology companies as well as emerging businesses, including a number of spin-out organisations from the nearby University of Oxford. It is managed and developed by MEPC Limited (MEPC) on behalf of the joint venture partners. At 250 acres, Milton Park is one of Europe’s largest and most successful integrated business, science and technology parks and home to over 250 organisations employing over 9,000 people.
Chris Taylor, Head of Private Markets at Hermes Investment Management said: “This loan is a key transaction for our new Milton Park partnership with CPPIB and is a testament to the strength of Milton Park, MEPC as asset manager, and the partner sponsors.
“The new Barings senior loan will enable MEPC to continue to efficiently manage and grow Milton Park on behalf of the partnership, and is expected to enhance returns for the partners.
“We are excited for the future of Milton Park with the support of Barings, who demonstrated their enthusiasm for the asset and partnership throughout the refinancing process, and we consider them to be an ideal ‘real estate minded’ and aligned long-term partner.”
CPPIB acquired a 50 per cent stake in Milton Park from Hermes Investment Management last summer. The deal was another significant milestone in the successful JV relationship, which already included partnerships in central London as well as at Wellington Place in Leeds – another MEPC managed and developed property – and at Paradise, Birmingham.
MEPC has recently overseen the development of Park Drive East at Milton Park, one of the largest speculative developments in Oxfordshire, accommodating the ongoing demand for quality office and laboratory space in the region. Consisting of three buildings offering state-of-the-art laboratory and Grade A office space, the first building was pre-let to Oxford Immunotec Global PLC (“Oxford Immunotec”) to expand its global headquarters at Milton Park in Oxfordshire.
James Dipple, CEO of MEPC commented: “This is fantastic news. With the new loan in place and the ongoing support of Hermes Investment Management and CPBIB, we have a really solid platform enabling us to continue to invest in Milton Park, as a best in class working environment within the UK’s most fertile economy. This will include further development, to meet the growing demand for high quality science and business space in the region, which will be fast-tracked through planning by our Local Development Order – enabling us to grow Milton Park by over a million square feet in the next ten years and deliver new buildings quickly to meet occupier needs.”
Having established its European lending platform in 2013, Barings Real Estate has successfully diversified its loan offering by sector, geography and loan type across senior, structured and development finance. Over the last 12 months, Barings Real Estate has closed over £1bn of senior and structured loans on deals including London and regional office investments, student and Private Rented Sector (multifamily) developments and the iconic Café Royal hotel in central London.
Chris Bates, Head of Core Mortgage Europe at Barings stated: “We are delighted to support Hermes and CPPIB in their plans for the Park and look forward to working with them and MEPC in its execution. Milton Park is an established hub for a growing community of businesses at the cutting edge of their field and Hermes & CPPIB’s plans for the Park will only enhance the offering and real estate value. The Milton Park loan represents our largest single facility in Europe to date and builds on the continued growth of our mortgage business.”
Eastdil Secured LLC and Bryan Cave Leighton Paisner LLP represented Hermes Investment Management and CPPIB in the deal, while Barings was represented by Herbert Smith Freehills LLP.
Notes to Editors:
Hermes Investment Management
We are an asset manager with a difference. We believe that, while our primary purpose is helping beneficiaries retire better by providing world class active investment management and stewardship services, our role goes further. We believe we have a duty to deliver holistic returns – outcomes for our clients that go far beyond the financial and consider the impact our decisions have on society, the environment and the wider world.
Our goal is to help people invest better, retire better and create a better society for all.
We offer clients access to a broad range of specialist, high conviction investment teams with £33.6 billion* assets under management. In Hermes EOS, we have one of the industry’s leading engagement resource, advising on £330.5 billion* of assets.
Hermes' investment solutions include:
• Private markets – Infrastructure, private debt, private equity and real estate
• High active share equities - Asia, global emerging markets, Europe, US, global, impact, and small and mid cap
• Credit - Absolute return, global high yield, multi strategy and global investment grade
• Multi asset - Multi asset inflation
• Stewardship – Active engagement, intelligent voting, sustainable development and advocacy
* Please note the total AUM figure includes £6.3bn of assets managed or under an advisory agreement by Hermes GPE LLP (“HGPE”), a joint venture between Hermes Fund Managers Limited ("HFM") and GPE Partner Limited. HGPE is an independent entity and not part of the Hermes group. £134.6m of total group AUM figure represents HFM mandates under advice. Source: Hermes as at 31 March 2018 with the exception of two portfolios totalling £3.6m valued as at 31 December 2017.
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Barings is a $305+ billion* global financial services firm dedicated to meeting the evolving investment and capital needs of our clients. We build lasting partnerships that leverage our distinctive expertise across traditional and alternative asset classes to deliver innovative solutions and exceptional service. Part of MassMutual, Barings maintains a strong global presence with over 1,800 professionals and offices in 16 countries.
Barings Alternative Investments (BAI), part of Barings LLC, is a 450+ associate team located across 11 countries that manages $52.3 billion* in client capital. BAI seeks differentiated sources of returns by incorporating decades of investment experience in alternative assets offering investors access to a diverse range of opportunities across private equity, real assets, asset-based investments and the four quadrants of real estate. We serve as a trusted partner to clients, leveraging our global presence and robust origination capabilities to identify the most attractive risk-adjusted return opportunities.
The Barings Real Estate team offers a broad range of investment opportunities globally across the public and private debt and equity markets. The team invests across all major property sectors with a focus on global relative value and trend-backed preferred strategies.
*As at 31 March 2018
Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 20 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments.
Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At March 31, 2018, the CPP Fund totalled C$356.1 billion. For more information about CPPIB, please visit www.cppib.com or follow us on LinkedIn, Facebook or Twitter.
MEPC Limited provides, creates and develops the right buildings and working environments for modern organisations, helping companies grow, succeed and belong to vibrant business communities. By investing in long term relationship with customers, MEPC understands the ever changing needs of business and delivers property solutions that are fit for purpose.
The business estates managed by MEPC accommodate over 350 organisations and circa 10,000 people working in manufacturing, professional services, and leading edge science and technology. The on-site teams consistently exceed expectations through their professionalism, dedication and approachability.
Investors benefit from this unique approach to working with occupiers which produces consistent class leading returns.
Milton Park is home to over 9,000 people and 250 organisations. As one of Europe’s largest business parks, Milton Park accommodates all types of business, from manufacturing and medical services to mobile technology. By having such a large and eclectic variety of companies and individuals, creates an environment that is inclusive, as well as exclusive.
MEPC is the manager and developer of Milton Park. For further information, please visit www.miltonpark.co.uk
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