MGPA invests £45m in distressed London office deal

The agreement to inject funds into Plantation Place, near Liverpool Street station, follows a breach of banking covenant by its owners Invista Foundation Property Trust and Tishman International.

MGPA, the London-based private equity real estate firm led by James Quille, has agreed to invest £45 million (€56 million; $83 million) in the office complex, Plantation Place in London.

According to people familiar with the situation, the current owners, Invista Foundation Property Trust and Tishman International are in default of a loan used to acquire the building for £527 million in 2006. MGPA declined to comment to PERE.

However sources says the banking covenants were breached following a fall in the value of the building.

US investment bank Houlihan Lokey Howard & Zukin is advising the trust that owns the property. The MGPA investment will be used to help repay £58 million of senior-ranking debt and £5 million of a junior-ranking loan. Invista insisted in July that it would not inject any more equity into Plantation Place.

MGPA is believed to be investing out of its $1.3 billion MGPA Europe III fund, part of the larger MGPA Fund III fund that raised a total of $5.2 billion in June. That fund also includes the $3.9 billion MGPA Asia III fund, the largest dedicated Asia fund ever raised.

In July, MGPA said in a statement it had investing in a Grade A office development in Milan for €53 million.