Hermes and CPPIB secure £200m loan at Milton Park

Hermes Investment Management, the £33.6 billion manager, and Canada Pension Plan Investment Board (CPPIB), have refinanced the existing facility secured on Milton Park, their jointly owned science and business park in Oxfordshire. The new seven-year £200 million fixed rate mortgage loan has been provided by Barings Real Estate, part of Barings LLC (Barings), one of the world’s largest diversified real estate investment managers, on behalf of an institutional investor.

Located in the Thames Valley region of the UK, Milton Park accommodates leading global science and technology companies as well as emerging businesses, including a number of spin-out organisations from the nearby University of Oxford. It is managed and developed by MEPC Limited (MEPC) on behalf of the joint venture partners. At 250 acres, Milton Park is one of Europe’s largest and most successful integrated business, science and technology parks and home to over 250 organisations employing over 9,000 people.

Chris Taylor, Head of Private Markets at Hermes Investment Management, said: “This loan is a key transaction for our new Milton Park partnership with CPPIB and is a testament to the strength of Milton Park, MEPC as asset manager, and the partner sponsors. The new Barings senior loan will enable MEPC to continue to efficiently manage and grow Milton Park on behalf of the partnership and the partners.

“We are looking forward to the future of Milton Park with the support of Barings, who demonstrated their enthusiasm for the asset and partnership throughout the refinancing process, and we consider them to be an ideal real estate minded and aligned long-term partner.”

CPPIB acquired a 50 per cent stake in Milton Park from Hermes Investment Management last summer. The deal was another significant milestone in the successful JV relationship, which already included partnerships in central London as well as at Wellington Place in Leeds – another MEPC managed and developed property – and at Paradise, Birmingham.

MEPC has recently overseen the development of Park Drive East at Milton Park, one of the largest speculative developments in Oxfordshire, accommodating the ongoing demand for quality office and laboratory space in the region. Consisting of three buildings offering state-of-the-art laboratory and Grade A office space, the first building was pre-let to Oxford Immunotec Global PLC to expand its global headquarters at the site.

James Dipple, CEO of MEPC, commented: “With the new loan in place and the ongoing support of Hermes Investment Management and CPPIB, we have a really solid platform to continue to invest in Milton Park. This will include further development to meet the growing demand for high quality science and business space in the region, which will be fast-tracked through planning by our Local Development Order – enabling us to grow Milton Park by over a million square feet in the next ten years and deliver new buildings quickly to meet occupier needs.”

Chris Bates, Head of Core Mortgage Europe at Barings, stated: “The future of Milton Park is exciting and we are pleased to support Hermes Investment Management and CPPIB in their plans for the park, and look forward to working with them and MEPC in its execution. Milton Park is an established hub for a growing community of businesses at the cutting edge of their field and Hermes Investment Management and CPPIB’s plans for the park will only enhance the offering and real estate value. The Milton Park loan represents our largest single facility in Europe to date and builds on the continued growth of our mortgage business.”

Eastdil Secured LLC and Bryan Cave Leighton Paisner LLP represented Hermes Investment Management and CPPIB in the deal, while Barings was represented by Herbert Smith Freehills LLP.