BROOKFIELD Asset Management is in talks with banks to refinance a loan that had backed its purchase of a Shanghai-based office tower complex five years ago, according to sources familiar with the matter.
The Canadian asset manager has an offshore senior loan of around US$700 million due year-end that funded its purchase of the mixed-use property site from Greenland Hong Kong Holdings in 2019, said the sources, asking not to be identified as the matter is private.
The overall financing package comprises offshore and onshore components. The size of the new offshore piece in discussion could be over US$900 million and Brookfield is in the process of getting bank commitments, said one of the sources. Meanwhile, the company has secured a 15-year onshore loan of two billion yuan (S$373 million) from Bank of China that pays an annual interest rate of around 4 per cent, the source said.
A spokesperson for Brookfield declined to comment. Bank of China did not immediately offer a comment.
Talks for the potential refinancing are taking place amid China’s ongoing real estate slump, where commercial vacancy rates have risen due to the country’s economic slowdown and swelling supply.
Some of the buildings in Shanghai’s most prestigious business districts were nearly half empty, and overall office vacancies climbed to 21.5 per cent in the third quarter, the highest in about two decades, according to CBRE Group. The risk is rising further this year on a supply pipeline that’s set to be the highest in five years.
Brookfield acquired the complex from Greenland Hong Kong for 10.6 billion yuan in 2019, according to an exchange filing, a transaction that ranked among the biggest commercial property deals in China by a foreign firm at that time.
The site comprises three premium A-Grade office towers and a retail mall at Greenland Huangpu Center, according to Brookfield’s website. BLOOMBERG
