Grosvenor Property UK (Grosvenor/GPUK) has agreed terms to raise £150 million in a private placement.

Finalised in May 2022 and drawn down in October 2022, the new 10-year 3.23% senior notes were placed with two US institutions. The investors, both existing partners to the business, have increased their holdings from a maturing £60m private placement.

Proceeds from the placement will be used for general corporate purposes, including:

• Ensuring the success of London’s West End via investment and development activity supporting the ongoing adaptation and improvement of Grosvenor’s London holdings.
• Continued diversification via the part ownership and successful management of Liverpool ONE and increasing allocation of capital to residential and office opportunities across England. 
• Delivery of GPUK’s environmental and social impact commitments – supporting resilient, successful places for the long term.

Grosvenor Property UK has committed to reducing emissions across all scopes by at least 52% by 2030 and 90% by 2040. Still the first European property company to have a validated long term science based target, the business is a sector leader on climate action and has already reported a 24% reduction in emissions since 2019, ahead of its net zero carbon pathway.

The terms of the transaction are linked to the business’ achievement of specific, stretching sustainability goals within the pathway, helping to develop the sustainable private placement market.

The placement follows the announcement of two transactions which provide further flexibility to GPUK’s balance sheet - a joint venture with Mitsui Fudosan UK to deliver a portion of its South Molton Triangle scheme, a sustainable mixed use development in Mayfair, London and the sale of its Bermondsey site. 

NatWest acted as placement agent on the new issue. 

Roger Blundell, CFO, Grosvenor Property UK, commented: “The support we received from two existing investors for this long term, well-priced private placement is a huge endorsement of the strategy we’re implementing. And with a KPI linkage mechanism in place, our financing strategy is now further aligned to our stretching sustainability commitments.

“The placement is the latest in a series of steps to ensure the business is well capitalised to enable us to drive forward our commercial, environmental and social impact ambitions. This also provides us with the flexibility to be opportunistic in our approach to changing market conditions.”

Rob Busby, Head of Private Placements, NatWest added: “We are very proud to have again supported Grosvenor in accessing the private placement market at attractive fixed rates. The inclusion of KPI metrics in the transaction helps to grow the sustainable finance aspect of the private placement market, where year-to-date volumes have already surpassed 2021 levels.” 

The detailed terms of the placement are not disclosed.