EUROPE - GE Real Estate's acquisition of European commercial property loans worth €1.27bn indicates a resurgence of property debt as an investible asset class, according to sources close to the firm.

The portfolio acquired last week from Capmark Europe comprises 39 loans secured on properties mainly in Germany.

It follows the acquisition at the end of last year of a £2bn (€2.5BN) UK commercial property loan portfolio from Bradford & Bingley, the UK building society.

GE Real Estate said it had been attracted by the quality and price of portfolios attractively priced against good quality underlying real estate.

Location was not necessarily a driver, said the source.

But the firm is likely to continue to mop up performing and non-performing loans amid market uncertainty.

In December it acquired a portfolio of non-performing Italian loans worth €2.6bn in a three-way deal with Pirelli Real Estate and Calyon. GE Real Estate holds 50% of the joint venture, its second with Pirelli.

The re-emerging credibility of property debt as an asset class had been part of the reason they are looking at it, and will look more closely going forward, said the GE-related source.