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O2 Arena retail development gets £185m Lloyds backing

A new designer outlet village planned for London’s O2 Arena has been given a £185m financing boost ahead of its planned opening in 2017.

Lloyds Banking Group has agreed to the loan with AEG, the O2’s owners, and is the bank’s largest commercial property development loan since the financial crisis in 2008.

The outlet village will consist of 204,000 sq ft of retail space, enough for an estimated 110 stores, situated in the outer ring of the O2.

Development had stalled after AEG’s partner, Land Securities, pulled out of the development in 2014. However, they have since been replaced by new partner Crosstree Real Estate Partners which, combined with this significant chunk of financing, will mean the project can now proceed.

The investment comes after Lloyds restructured its commercial property division in March of last year. John Feeney, Global Head of Commercial Real Estate, told the Financial Times development lending of this scale would be ‘at the centre of [Lloyds’s] strategy’ and that the financing was ‘testament to the combined strengths of [their] balance sheet and distribution platform.’