Apollo Global Management has agreed to loan £610 million ($778 million) to Canary Wharf to pay off its bonds, as the New York-based investment group seeks to double its assets under management to $1.5 trillion in the next five years.
Apollo’s loan was secured against the majority of Canary Wharf’s 1.2. million square feet retail portfolio, which is 97% occupied, the landlord said on Tuesday. The funds will allow Canary Wharf to repay bonds that mature in April 2025 and 2026.
Canary Wharf has managed to secure more than £2 billion in refinancing over the past year, leaving the company with no major debts due before 2028.
“We have achieved a significant amount of financing over the last 12 months and this latest deal with Apollo is testament to the strength of the proposition and our performance at Canary Wharf,” Becky Worthington, chief financial officer at Canary Wharf, said in a statement.
Canary Wharf’s retail properties were valued at £1.16 billion as of June this year, and they generated £34.2 million of rental income in the first half of the year.
Ben Eppley, Apollo’s head of real estate credit for Europe, described the properties as one of London’s premier shopping and leisure destinations.
“Our ability to transact in size and provide a tailored solution we think demonstrates why leading developers and real estate owners like CWG [Canary Wharf Group] choose to partner with Apollo’s Real Estate Credit business,” he added.
Canary Wharf was originally envisioned as an alternative to the City of London, but the shift to hybrid working has reduced the need for office space across London. Faced with the upcoming departures of big tenants including HSBC and Clifford Chance, the east London landlord is seeking to reinvent itself by building more apartments and providing more entertainment and leisure offerings.
Canary Wharf’s joint owners—Canadian asset manager Brookfield and the Qatar Investment Authority sovereign wealth fund—had injected £300 million of new equity into the landlord last year.
Apollo said it had $733 billion in assets under management by the end of September, but it’s aiming to double its portfolio to $1.5 trillion by 2029. The firm had made its name in private equity after it was established in 1990 by its billionaire cofounders Marc Rowan, Leon Black and Joshua Harris.
But the firm has grown to become one the world’s largest providers of private credit as companies have increasingly sought credit from non-bank lenders. Apollo has underwritten $18 billion worth of such deals over the past year for the likes of Air France-KLM, Intel, and BP.