King's Cross project secures last minute funding
The £2bn redevelopment of the King’s Cross area of central London has secured an 11th-hour funding package for its next phase after talks with a consortium of international banks fell through.
The 8m sq ft office, retail and residential scheme, one of Europe’s largest redevelopment projects, was last month close to signing a £400m development finance deal with a consortium of banks including EuroHypo and Deutsche Postbank.
However, talks over the funding package ended as conditions in the financial market deteriorated. The partnership behind the development will instead need to use its own money to take the project forward – a sign of fast-changing circumstances in the traditionally debt-reliant commercial property market.
Argent, the developer, backed by the Hermes-managed BT Pension Scheme, needs to start the next phase of work this month in order to finish the first buildings in time for the September 2011 term at the University of Arts, one of the main tenants. Argent has also agreed to let space to Sainsbury’s for its new headquarters.
Following weeks of talks with other stakeholders in the joint venture behind the redevelopment, Argent has agreed to fund the necessary work, partly through an existing mezzanine facility.