Henderson Global Investors says money will be used to repay existing loan facilities
THE firm behind the St James Shopping Centre in Edinburgh has agreed a new s70 million refinancing package to pay off debts from the delayed development.
London-based Henderson Global Investors has agreed terms on a deal with German bank BayernLB.
The money will be used to repay existing loan facilities.
Adrian Heft, treasurer for property at Henderson, said: "This refinancing demonstrates Henderson's strong credit profile, and reflects the external confidence in the Shopping Centre Fund which is one of Henderson's trophy products with assets including Bullring in Birmingham, Buchannan Galleries in Glasgow and the St James Quarter in Edinburgh."
Henderson bought St James Centre from Donegal Place Investments for s184 million in 2006 and City of Edinburgh Council approved an s850 million redevelopment project in February 2009 but little has been announced since then.
It was reported in March this year the funding vehicle used to buy the 13-acre site, Henderson UK Shopping Centre Fund, is limited by statute in how much it can finance the development.
Henderson is understood to have held discussions with other investors about helping to fund the scheme but as yet has not attracted any partners.
The opening of the overhauled centre is still thought to be September 2016.
Henderson's original plans for the St James centre site was a s200 million five acre redevelopment to be complete by 2008.
This was later expanded to an s850 million project encompassing 13 acres to include hotels, homes and office space.
Property management firm Colliers CRE predicted in its 2009 Summer Review the project would not get off the ground until at least 2013 given the poor state of the commercial property market in Scotland.
Henderson has since confirmed the first stage demolition work was unlikely to get underway before late next year or into early 2013.
St James Centre was designed in 1964 and construction was completed in 1973 on the 450,000 square feet retail centre.
Henderson's outline plan for the redevelopment of the site includes doubling the retail space to more than 1 million sq. ft as well as two new hotels, 250 apartments, 160,000 sq. ft of office space and 1,800 underground parking spaces.