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A new finance deal has been agreed for Birmingham’s famous Mailbox complex, bringing to an end a sale process launched last year.
London-based funder Leumi UK has provided a £65 million loan to its asset manager Martley Capital Group to refinance the mixed-use building.
Additional capital has been generated via a separate loan note issued by Mailbox REIT, the trust which owns the building, meaning its previous lender Deutsche Bank has now all but ended its relationship with the asset. The German bank was reportedly owed around £100 million.
Originally serving as Royal Mail’s sorting office and covering the entire Midlands, the canalside building has since been transformed into a major mixed-use destination, encompassing 1.07 million sq ft of space across a 6.2-acre footprint.
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It is home to BBC Midlands, a Spaces co-working hub, Everyman cinema, car park and a host of different shops, bars and restaurants, generating annual rental income of around £12 million.
In November, property agency JLL was recruited to find a buyer for the building, with a price tag of around £120 million. Birmingham-based developer and investor SevenCapital was among the rumoured parties eyeing up the sale.
Martley Capital Group was created at the turn of this year by Richard Croft and took over the asset management of the Mailbox from M7 Real Estate which Mr Croft set up in 2009 and sold to Oxford Properties in 2021.
Dan Boakes, managing director of debt capital markets at Martley Capital, said: “The Mailbox in Birmingham is a key cornerstone of our portfolio and we needed a lender who could not only navigate the complexities of this deal but exceed our expectations.
“Leumi UK’s proactive approach was instrumental in ensuring the success of this transaction.”
Oliver Stenning, relationship director at Leumi UK, added: “We are delighted to complete our debut transaction with Martley Capital Group, enabling the recapitalisation of The Mailbox.
“This deal required an entrepreneurial approach and demonstrates Leumi’s conviction to backing buildings with strong fundamentals and sponsorship, regardless of the asset class.
“We are excited to develop our relationship with Martley as they continue to expand their platform.”
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