NatWest completes sale of Mercatus shopping centre loan portfolio

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NatWest has exchanged contracts on the sale of Project Mercatus, a portfolio of loans to institutionally owned city centre shopping centres.

The portfolio, representing debt of over GBP400 million, has been sold to a consortium comprising Attestor and Octane Capital Partners, two experienced purchasers of such loan portfolios with a track record of working with customers to develop long term solutions; and Ellandi, a leading community retail asset manager.
NatWest believes that Attestor, Octane Capital Partners and Ellandi will collectively be able to support the long-term potential of these shopping centres, with NatWest achieving its aim to secure a buyer that is good for both the customers involved, and the communities that these shopping centres serve. 
The bank plans to redeploy the resulting capital from this portfolio sale into its future lending to UK business, allowing the bank to continue to focus its support of the economic recovery from the pandemic.
Phil Hooper, Head of Real Estate, NatWest Group, says: “The shopping centre sector has been under pressure for a number of years, and this has been greatly exacerbated by the Covid-19 pandemic. Whilst we have looked to support all our customers through the market disruption caused by Covid-19, in some cases a sale provides the platform for the most sustainable long-term solution. Through this trade we have looked to engage with Investors who will continue to work with the customers on a medium - long term basis, and we will re-invest the funds received to further support the UK recovery.”

James Rowney, Head of Solutions, Restructuring, NatWest Group, says: “This portfolio sale demonstrates the bank’s ability to find liquidity for commercial real estate assets that have financial challenges and that may require additional investment and re-configuration to meet current and future shopping needs. A key part of our decision-making process was therefore an aligned approach with potential investors and Attestor, Ellandi and Octane Capital have been clear throughout this process about their desire to engage positively with these institutional customers and support the shopping centres for mutual long-term benefit.”   
PwC Financial Services acted as lead advisor, NatWest Markets Plc as advisor and Ashurst LLP as legal counsel.

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