Palmer Capital looks set to wrest control of a partially developed 1m sq ft mixed-use opportunity in Bristol city centre after striking a deal to buy a majority stake in the £100m debt securing it.
The fund manager and venture capital investor has agreed a deal with lender Deutsche Postbank to buy part of the debt held against Finzels Reach, a regeneration scheme in the hands of receivers at Savills.
It is thought to be paying about 50p in the pound for the stake in the loan, which is the key to gaining control of the largest development opportunity in the city.
The loan was part of Deutsche Postbank’s €1.9bn (£1.7bn) predominantly UK commercial loan book, which Citigroup and JP Morgan are vying to buy.
Palmer is working in a joint venture with Cubex Land, one of nine developers it backs.
Finzels Reach, which has an estimated gross development value of £225m, was being developed by HDG Mansur, but in April LPA receivers at Savills were appointed after HDG failed to make a payment on a development loan.
Palmer is now in pole position to take control of the site as receivers continue to devise a plan to secure the scheme’s future and maximise returns for Postbank on the outstanding debt.
Work on the former Courage Brewery site began in 2009 and has so far included the 118,000 sq ft partially-let Bridgewater House offices and the Malt House and Castle Wharf residential blocks, totalling around 380 flats.
Planning permission exists for another 164,000 sq ft office building, with further flats, shops and leisure elements.
The scheme fell victim to the haphazard nature of the recovery after HDG made the decision in 2009 to speculatively build Bridgewater House in time for a 2011 completion.
In late 2011 it settled for a debut deal with accountant BDO for just 9,000 sq ft on part of the top floor, as tenants continued to exercise caution in the face of the economic malaise.
An 18,000 sq ft letting to Barclays on the fourth floor came midway through the receivership.
A string of agents has advised on the scheme since its inception, including BNP Paribas Real Estate and Strutt & Parker. Knight Frank was brought on board in 2008 and remains an agent, alongside Savills, which was brought in as part of the receivership.
All parties declined to comment.
