On Friday, UK-based specialist financier and joint venture partner Reditum Capital successfully closed a £10m bridging facility with UK developer The High Street Group over two prime regional developments in Newcastle city centre. A positive development in a credit market that has been suffering from Covid-19 induced uncertainty, the completion of this financing facility—initiated within a tight timeframe of two weeks— will enable The High Street Group to move forward with its planned development contributions toward Newcastle’s regeneration, garnering headlines recently with the acquisition of Newcastle United from Sports Direct CEO Mike Ashley by a leading investment consortium of PCP Group and the Saudi Public Investment Fund.
The deal’s underlying assets consist of Hadrian’s Tower, a landmark 27-storey residential development comprising 162 luxury apartments and a rooftop champagne bar, due to complete in October 2020, and Strawberry Place, a prime parcel of land directly adjacent to the Newcastle Football Stadium with planning permission in place for 2 residential blocks of 328 units, 12,000 sq m of office space and a 200-bed hotel. When complete, Hadrian’s Tower will be the highest tower in Newcastle, standing at 83 meters, and represents a welcome influx of new investment into the city centre. The land at Strawberry Place also holds great promise for future investment as the most prominent undeveloped parcel of land in proximity of the stadium, and members of the Newcastle United’s purchase group and private equity groups including Reuben Brothers are already highly acquisitional in the Newcastle market. Reditum arranged the financing with second charge security over Hadrian’s Tower and first charge security over Strawberry Place.
“The deal represents positive news for a credit market temporarily set back by Covid-19 uncertainty,” notes Reditum Capital CEO Mark Stephen, “Reditum Capital is one of the few market players still well-capitalised and prepared to provide short-term financing during this time to deals with strong underlying fundamentals like this one.”
Reditum Capital was founded in 2013 and has enacted over £500m worth of joint venture and bridging financing facilities on large-scale residential, commercial and hospitality assets in the UK, Europe and US. The financier has previously worked with The High Street Group, a UK developer and asset manager founded in 2006, through a bridging facility on a residential project in Milton Keynes. For the Newcastle transaction, Reditum Capital was represented by Squire Patton Boggs. Valuations of the underlying assets were conducted by Lambert Smith Hampton and Duff & Phelps.