Barings has secured a £250m (€288.5m) mandate from UK insurer Phoenix Group to invest in UK real estate debt.

Barings said it has already agreed its first deal for the new mandate, a £30m first mortgage loan on a 30-year term secured against a mixed-use office and retail property on Tottenham Court Road, London, with a loan to value below 50%.

Barings said it will work with the Phoenix Group to build a portfolio of investment-grade buy and hold UK commercial mortgage loan assets across a range of commercial property sectors. The target assets will include industrial, residential and offices diversified across Greater London and regional locations, the manager said.

Sam Mellor, the head of Europe and Asia-Pacific real estate debt at Barings, said: “We are extremely pleased to be partnering with Phoenix as they build their exposure to this asset class. The insurance market is strategically important to our business and we have a long history of managing capital for insurers, with Phoenix’s focus on customer outcomes and sustainability aligning closely with our own priorities.

“The Phoenix mandate also aligns with our wider UK debt strategy targeting loan sizes of between £30 million and £200m and diversified across the UK geographically and by asset class.”

James Mitchell, the head of manager oversight at Phoenix Group, said: “We are delighted to establish this partnership with Barings with the first deal for this UK real estate debt mandate.

“The Barings team’s experience and expertise in this asset class were clearly differentiated during our selection process and we are looking forward to working with the team to help facilitate our growing needs in this asset class.”

To read the digital edition of the latest IPE Real Assets magazine click here.

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