EUROPE – LaSalle Investment Management has raised £600m (€726m) for its latest real estate debt fund, which will provide mezzanine and whole-loan financing for real estate transactions in the UK and Germany.
LaSalle Real Estate Debt Strategies II, which is already 25% invested, attracted commitments from 10 institutional investors across North America, Europe and Asia.
It is the latest in a series of debt funds and programmes launched since LaSalle set up its European debt platform in 2010, and follows its UK Special Situations Fund, UK Junior Loan Programme and Residential Finance Fund.
LaSalle was one of the first real estate fund managers to move into the commercial property lending market in Europe following the crisis.
Its initial strategy was to focus on mezzanine – a form of debt that has a higher loan-to-value (LTV) ratio and supplements traditional senior debt – but the latest fund is able to provide whole loans that comprise both the senior and mezzanine parts.
A number of investment managers have launched funds pursuing whole-loan strategies, which have the potential to be more nimble than those relying on there being another source for the senior debt.
UBS Global Asset Management has launched a whole loan strategy, but, whereas this fund will retain full exposure, LaSalle is likely to syndicate the senior part after the deal is done, leaving it with mezzanine-type exposure.
Amy Aznar, head of debt and special situations at LaSalle, said the recent increase in competition among senior debt providers supported a dual approach that targeted both mezzanine and whole loans.
"We are seeing more liquidity, particularly in the senior side of the market, than we did six months ago," she said.
"In a lot of cases, mezzanine could be a very interesting way to team up with some of those aggressive senior banks.
“It also gives us more confidence to invest in a whole loan, where, ultimately, we would have a syndication strategy for the senior, keeping the mezz."
The fund will offer single loans between £10m and £200m and lend up to 80% LTV across all real estate sectors, although it will focus on office, retail, industrial and residential assets.
Last year, LaSalle launched a fund to finance residential and student accommodation developments in London on behalf of Dutch pensions group APG.
Aznar said the fund was "significantly invested" but expected APG to provide further capital once the "first tranche" had been deployed, as LaSalle believes there are many more opportunities for the strategy.
