Goldman Sachs Provides €1bn Development Loan for Olympia London

Main Photo: The new-look Olympia – imagined

Date: March 2020

Location: Olympia, Kensington, London, UK

Names: Olympia London

No. of Keys: TBA

Seller: DFI and Yoo bought Olympia in 2017 for £296m from CAPCO – Capital and Counties Properties PLC, in a deal that combined the other famous exhibition centre in the area, Earls Court in an ill-fated residential scheme. Capco in turn bought the two venues in 2009.

Owner: Deutsche Finance International and Yoo Capital have agreed a €1bn (£875m) development loan facility with Goldman Sachs Merchant Banking Division, to part-finance the development to transform Olympia London into a world-leading cultural destination.

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 €1.5bn (£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 ft² 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 around-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, said: “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, commented: “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, said: “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.”

THPT Comment: With two new (up-market) hotels coming online in a few years time, we understand that this is making Beng Seng Ong, owner of the Hilton London Olympia a little nervous, as currently the closest four-star hotel to Olympia, and we think the hotel is for sale.

Delighted that Olympia will not only be kept as a major conference and exhibition centre, but finally the roof will get fixed! Exhibitors complain that the pigeons flying into the halls “a real distraction”!

First Seen: Europe Real Estate

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