Grosvenor and Generali launch UK residential debt co-investment strategy

UK property firm Grosvenor and Italy’s Generali Real Estate have launched a new partnership to provide debt financing to UK residential developers.

Building on Generali Real Estate’s experience of financing real estate projects and Grosvenor’s experience as a developer with knowledge of the UK housing market, the partnership has been seeded with an initial £50m (€58m) from each organisation and will operate as a ‘pari-passu’ co-investment strategy.

Generali Real Estate and Grosvenor will look to address the shortage of funding available from traditional lenders by providing loans of up to £60m for residential projects of all types and tenures, with a focus on developments with strong environmental credentials in London and the UK’s regional cities, the companies said.

The move expands Grosvenor and Generali Real Estate’s existing strategies in real estate debt. Grosvenor launched a £120m residential development debt strategy in April last year, while Generali’s is seeking to raise €1bn pan-European Real Estate Debt Fund II.

The joint venture’s first transaction will support Aitch Group to deliver 65 homes, comprising 49 market-value and 16 affordable homes near Canary Wharf in London.

Rachel Dickie, executive director of investment at Grosvenor Property UK, said: “We are delighted to be partnering with an organisation of Generali’s scale and expertise. This new partnership enables us to ramp up our lending activity, combining our capital and knowledge of the UK housing market to back the delivery of new homes – be that for sale, for rent, later living or student accommodation.”

Stefano Lombardo, head of commercial real estate debt portfolio construction at Generali Real Estate, said: “We are glad to announce this first transaction closing within the context of a strategic partnership with a renowned real estate player such as Grosvenor. The partnership is key for us to further enlarge our debt investment strategy in the UK, which we consider one of our focus countries.”

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