In a rare moment of optimism for UK commercial property, Deutsche Bank (NYSE:DB) is moving ahead with a 1.25 billion ($1.7 billion) refinancing of London’s Olympia redevelopmenta deal that could end up being one of the largest real estate loans ever seen in Britain. The five-year loan, arranged by JPMorgan and Evercore, will replace the 875 million facility issued by a Goldman Sachs fund back in 2020. The project, steered by Deutsche Finance International and Yoo Capital, is approaching the final stretch of a 2.1 billion transformation, bringing 1.5 million square feet of hotels, exhibition space, and restaurants to West London.
According to people familiar with the deal, more than 15 lenders competed to provide financingranging from investment banks to debt fundssuggesting a shift in sentiment that’s worth paying attention to. While the loan hasn’t officially closed, sources say it’s priced above 500 basis points and expected to be finalized before the project’s completion this fall. That level of demand for a single asset deal may hint at early signs of recovery in London’s bruised commercial property sector, even as caution still dominates broader capital markets.
The Olympia site was originally acquired in 2017 for 296 million. Seven years and billions of pounds later, it’s being recast as a cultural anchor for West London. For Deutsche Bank, this could be a well-timed betbacking the asset through to stabilization and possibly unlocking new long-term upside. The market may still be jittery, but this deal shows that, in the right pockets, capital is not just returningit’s getting competitive.
This article first appeared on GuruFocus.