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Starwood Capital could provide debt funding to UK’s Heron Tower

19 Sep 2013

heron towerPrivate equity firm Starwood Capital could reportedly be involved in a refinancing deal for London’s Heron Tower skyscraper.

The skyscraper, which is struggling to attract tenants, could be sold by lenders which are frustrated by the owners inability to agree to a refinancing deal, said Reuters, citing a source familiar with the talks.

Heron’s owners, including property developer Heron International and the State General Reserve Fund of Oman, have been in talks over a deal to refinance a £315m loan as part of an agreement that could see the skyscraper receive more than £100m of equity, said the source.

Banks including Wells Fargo and Landesbank Hessen-Thuringen are involved in the discussions as is Starwood Capital, which could provide debt funding to Heron.

The skyscraper, which opened in 2011, has managed to let only 59 per cent of its office space.

“This is not about anyone’s ability to write the cheque, this is a boardroom punch-up,” said the person.

“If the shareholders can’t agree between themselves on how to take it forward, and the bank facility needs refinancing, then the bank will need to appoint receivers.”

It was recently reported that Starwood is looking to buy the management business of Waypoint Homes.

Earlier this month Starwood Capital bought seven shopping centres in the US from Australian retail company Westfield Group.

In April this year Starwood closed its Starwood Distressed Opportunity Fund IX, which reached its cap of $4.2bn.

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