Martley and Leumi back Reading office with £65m loan
Debt secured against Tristan Capital Partners’ 386,000 sq ft Campus building
14 January 2025 15:50 BST | by May Agaran
What: Tristan Capital Partners has secured a £65m refinancing for its Campus building in Reading
Why: Leumi UK provided a £38m senior loan with Martley and Glade Capital supplying a £27m mezzanine debt
What: next Tristan to seek new lettings for the newly refurbished 385,416 sq ft property to increase occupancy
Debt secured against Tristan Capital Partners’ 386,000 sq ft Campus building
Leumi UK and Martley Capital Group have agreed to the £65m refinancing of an office building in Reading owned by Tristan Capital Partners.
Located in Reading International Business Park, the Campus building is under Tristan’s European Property Special Opportunities 5 Fund (EPISO 5). It was acquired at the end of 2020, with Tristan undertaking an extensive refurbishment of the property to create 385,416 sq ft of grade A office space.
Real estate lender Leumi provided a £38m senior loan, marking its third transaction with Tristan over the last 12 months. Martley Capital, in partnership with Glade Capital, supplied a £27m loan.
Martley’s deal is its fourth transaction in the Martley Capital Financing strategy, which provides loans for new acquisitions to borrowers which require refinancing or have existing loans that have suffered LTV breaches due to declining market values. The Richard Croft-led firm 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% LTV.
Tristan’s business plan for the Campus asset is to increase occupancy through new lettings, capitalising on tenant demand for high-quality space due to the ongoing lack of new office developments.
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.”
Gez O’Sullivan, relationship director at Leumi UK, added: “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.”
In January last year, Martley arranged a £32.5m mezzanine three-year loan – its debut transaction – secured against five warehouse properties in Luton, Glasgow, Sunderland, Cardiff and Newport. The assets are owned by Tristan Capital Partners’ European Property Special Opportunities (EPISO) 3 Fund.
More recently, Green Street News revealed that Martley had successfully refinanced the Mailbox in Birmingham, having secured £90m of fresh debt. The financing includes a senior facility and a loan note instrument that has allowed incumbent lender Deutsche Bank to recoup the majority of its outstanding debt. The German bank was owed around £100m.
Leumi UK has provided around £65m of debt to the asset’s capital stack, with the financing gap closed by the issuance of a loan note by Mailbox REIT.
The loan note – which has an array of investors participating, including Tokoro Capital and existing shareholders of Mailbox REIT – has effectively replaced the outstanding Deutsche debt not covered by the Leumi loan at a mild discount to par.
Martley Capital was launched by Croft after he stepped down as executive chairman of M7 Real Estate. He co-founded the €7bn pan-European real estate asset manager which was later sold to Oxford Properties in 2021.
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