The mezzanine lender to a mixed-use scheme in Shoredicth to the north of the City of London has taken over the project after a loan was not repaid at maturity earlier this year.

Credit specialist Tikehau Capital has taken control of The Arc at 225 City Road, CoStar reported. The project is being developed by Belgian developer Ghelamco, its first UK scheme.

The Arc was scheduled to complete earlier this year and comprises 150K SF of offices, 100 apartments and 7,500 SF of retail. A tower that is part of the building rises to 22 storeys.

Ghelamco funded the project in 2020 with £175M of debt, consisting of a £120M senior loan from Goldman Sachs and a £55M mezzanine loan from Tikehau.

The mezzanine loan matured in June, and Tikehau took control of the project after it wasn’t repaid, CoStar reported, adding that the senior loan was scheduled to mature in June 2023 with an option to extend for 21 months.

Ghelamco said the project hit problems when contractor Henry Construction Projects went into administration in 2023. The company took over as contractor, but when an exit strategy couldn’t be agreed with its lender, a transfer of the project was agreed, Ghelamco said.

The company said it took a €64M (£53M) loss as a result of the project being transferred in its 2024 half-year accounts.

As of the end of 2023, the office portion of the scheme had not been leased. Apartments at The Arc sell for around £1M, and 46 apartments had been sold for around £50M as of June this year, Ghelamco said in financial results.

In February, Ghelamco bought its second UK project in Battersea, which will include 113 apartments in a 25-storey tower. Cheyne Capital is funding the scheme.