RBC and Otera provide €608m loan to St Modwen for logistics portfolio

Global investment bank RBC Capital Markets (RBC) and Otera Capital have arranged a £525 mln (€608 mln) loan to UK property developer St Modwen.

Blackstone-owned St Modwen will use the five-year financing instrument to develop a portfolio of logistics properties, encompassing a total of 464,515 m2 of modern logistics space. The properties will consist of small, mid-box, and big-box units across major UK hubs.

The loan will finance both the development and investment phases of the various logistics projects.

This marks the first real estate debt investment in the UK for Otera Capital, the real estate lending unit of La Caisse de dépôt et placement du Québec.

Gadi Jay, senior managing director, Blackstone Real Estate Capital Markets said: ‘We are delighted to continue expanding our deep and longstanding relationship with RBC and are grateful for their ongoing support and partenership with our business. We are also pleased and grateful to have worked with Otera on their first European financing and look forward to doing more together in the future.’

Axel Brinkmann, European head - Real Estate Capital Partners and real estate corporate banking for RBC added: ‘We are very pleased to continue to support our longstanding client Blackstone and the St. Modwen team on their journey to realize the potential of the St. Modwen Logistics business by delivering best-in-class, ESG-focused logistics space in a tightly supplied market. The hybrid and bespoke nature of the facilities reflects RBC’s ability to structure and execute innovative and market leading debt solutions which support our clients’ strategic aims. We are also delighted to partner with Otera, with whom we have a strong lending relationship in North America, on their first lending transaction in the UK market.’

Rana Ghorayeb, president and CEO at Otera commented: ‘We are thrilled to have completed our first debt transaction in the UK, a strategic market which provides portfolio diversification. This transaction aligns well with our strategy of supporting our long-standing best-in-class relationships, such as Blackstone and RBC, as well as establishing a new relationship with St. Modwen on high conviction assets with a strong ESG focus in our targeted countries of Canada, the USA, and the UK. We see a solid alignment and a shared approach to risks with RBC's ability to structure and implement innovative and market-leading debt solutions.’

Allen & Overy advised the arranger and lenders, while Blackstone and St Modwen were advised by Simpson, Thacher and Bartlett. CBRE Loan Services Limited acted as facility and security agent.

St Modwen owns and manages a logistics portfolio of nearly 1 million m2. Since the start of 2023, it has delivered 120,774 m2 of logistics space with another 139,355 m2 due to be added in 2024.

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