London’s Dorsett City hotel receives green loan

Dorsett City Hotel receives green loan

[Credit: Dorsett City London]

UK: Aareal Bank has closed a green loan agreement with an affiliate of Cerberus Capital Management (CCM) and Highgate to refinance the purchase of Dorsett City London hotel.

Early in October 2021, CCM and Highgate announced the acquisition of the 267-key Dorsett City London Hotel and the 130-unit Grosvenor House Suites aparthotel.

CCM and Highgate have received a five-year senior loan from Aareal Bank which is collateralised by the hotel meeting sustainability criteria. This criteria is to be maintained throughout the term of the loan.

Christof Winkelmann, member of the management board at Aareal Bank, stated: “At Aareal Bank we believe that the Corona pandemic has contributed to a heightened awareness of sustainable management. I therefore expect that more and more sectors of the economy will systematically integrate sustainability requirements into their business models. The financial sector has a prominent role to play in this process. Therefore, it is our intention to steadily increase the share of green buildings in our loan portfolio and we are pleased be able to support Cerberus and Highgate on their path to sustainable investments.”

Mehdi Khimji, managing principal at Highgate, said: “Highgate’s philosophy over three decades of investing in Europe has been to acquire well-located real estate at discounts to replacement cost, and to pursue opportunities where Highgate has a distinct ability to add value.  The Dorsett City London Hotel exemplifies that strategy. Highgate plans to continue pursuing single asset, portfolio and platform wide opportunities throughout Europe by adhering to the key principles that have contributed to the company’s historical success – fostering relationships with key industry constituents; innovating around operational, distribution, and hotel positioning capabilities; targeting opportunities where Highgate has a distinct ability to add value; and acting as a highly-reliable and collaborative counterparty on transactions.”

Dorsett City Hotel has received a BREEAM Very Good certificate. The assessment measures the performance of a building to evaluate specification, design construction and use across eight categories.

According to Aareal’s Green Finance Framework, Dorsett City Hotel marks the second green loan the bank has provided. The company was advised on legal issues by Bird and Bird and on the valuation by CBRE.

Cerberus has more than $55 billion of assets in the credit, private equity and real estate sectors. 

Highgate currently manages a portfolio of over 350 properties owned, under management or in asset management, or under development in the USA, Europe and across the Caribbean and Latin America.

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