Deutsche Finance International and Yoo Capital have agreed a £875m development loan facility with Goldman Sachs Merchant Banking Division, to part finance the redevelopment of Olympia London.
Following the loan agreement and with the addition of equity backing already in place from German institutional investors Bayerische Versorgungskammer (BVK) and Versicherungskammer Bayern Group (VKB), the £1.3bn Olympia regeneration project is now fully funded.
With the main construction contract expected to be awarded imminently, initial construction work on the Olympia project, which is designed by Heatherwick Studio and SPPARC architects, is due to begin this quarter. The masterplan will see the full redevelopment of the 14-acre site, including the existing exhibition halls, with 1.3 million sq ft of additional commercial space being created. Aimed at maximising the deep-rooted brand heritage of this 134 year old, world renowned venue, the transformational development will be undertaken in such a way that the exhibition space will remain fully operational throughout.
With an ambition to create a cultural hub in west London and transform Olympia into a round-the-clock leisure and entertainment destination, the development plan also includes a four-screen arthouse cinema, a 1,400-seat performing arts theatre, a 4,100-capacity music venue, a “jazz club style” restaurant and venue, shops, cafés, two hotels and 2.5 acres of public space, including pedestrianised squares and a sky garden.
John Hitchcox, Chairman of Yoo Capital, says: “This is a boost for London and a clear indication of investor confidence in this transformative project to regenerate an iconic landmark. We’re moving into a pivotal year for the redevelopment, and with the finances of the exhibition business, investors as well as local community stakeholders now safeguarded, we can look forward to delivering a destination that showcases London at its very best, with culture and creativity right at its core.”
Gavin Neilan, Co-Founder and Co-Managing Partner at DFI, says: “To have secured a commitment of this level from Goldman Sachs is a compelling endorsement of the Olympia project, and indeed of the long term outlook for London as a global tourist and business destination. We are very grateful for the ongoing support of all our funding partners and, with the development now fully funded, we have a solid foundation to move forward with our plans to transform this iconic location and unlock Olympia’s enormous potential.”
Chris Semones, Managing Director at Goldman Sachs Merchant Banking Division, says: “The history, heritage and location of this development, and the clear potential it holds, present a compelling investment case and we are very pleased to be partnering with DFI and Yoo Capital to support what will be one of the most exciting projects in London over the coming years. This transaction continues our strategy for Real Estate Credit Partners III to originate large loans to hold against high quality projects with excellent sponsorship.”