Patron Capital provides €125.6m in UK real estate loans

European real estate investment manager Patron Capital has completed its first direct lending deals under its newly launched real estate credit business.

UK residential - Patron Capital

These two loans, totalling £107 mln (€125.6 mln), include a £87 mln (€102 mln) senior refurbishment loan for a prime office building in the City of London and a £20 mln (€23.4 mln) senior loan for a UK residential portfolio.

This expansion into real estate credit follows the appointment of Henry Randolph as Partner to lead the initiative and the establishment of the Patron Capital Credit SMA. This discretionary vehicle, backed by a strategic partnership with Mitsubishi Estate Global Partners, allows for the swift execution of new loans.

The larger loan, £87 mln (€102 mln) over three years, is for Juxon House, an 11,334 m2 office building near St Paul's Cathedral. It refinances an existing loan and fully funds a £26 mln (€30.5 mln) refurbishment program to upgrade approximately 3,252 m2 of top-floor office space to Grade A standard. Patron collaborated closely with the borrower, GR Life Style Company Limited, on construction and design, leveraging its investment and in-house construction expertise.

Additionally, Patron provided a £20 mln (€23.4 mln), three-year senior whole loan to Signal Capital, secured by an income-generating UK residential portfolio.

Patron's credit division aims to provide whole loans between £20 mln (€23.4 mln) and £100 mln (€117.4 mln), and mezzanine lending under £25 mln (€29.3 mln), in the UK and select European countries. This lending will support value-add, refurbishment, and development strategies in asset classes where Patron's equity business has significant expertise.

Stephen Green, senior partner at Patron Capital, said: “We are leveraging our 26-year track record in value add and opportunistic investment in Europe to work with borrowers, taking a granular approach to underwriting development, refurbishment, value-add and operational strategies.”

Henry Randolph, partner, Credit at Patron Capital, added: “We are actively looking at additional opportunities from ground-up development through to investment lending, with a particular focus on mid-market whole loan and mezzanine lending where we can build strong, long‑term borrower relationships.”

The financing for these deals is partly provided through a loan-on-loan arrangement with MUFG Bank, but Patron Capital maintains full control over how the loans are structured, how the assets are managed, and its relationships with borrowers.

Legal and advisory services for these transactions were provided by Addleshaw Goddard, Hogan Lovells, Newmark, and Nexus RE. For Juxon House, GR Life Style continues to work with Savills as their Development Manager and Leasing Agent.