Octopus Real Estate and Bayview Asset Management have teamed up to provide two-to-five-year senior investment debt to the UK commercial real estate market.
The funding partnership has an initial commitment of £450m (€523.8m) to target loan opportunities of up to £25m, the companies said.
Nick Westoby, commercial fund manager, Octopus Real Estate, said the structural undersupply within the sub-£25m part of the market ”provides significant opportunity and plays to our strengths”.
“The granularity and liquidity of smaller loan sizes have been tested over the pandemic, showing robust performance. The opportunity to partner with Bayview was compelling, given their deep understanding of commercial real estate and wider corporate values.”
Benjamin Davis, CEO of Octopus Real Estate, said: “Our partnership with Bayview further demonstrates the excellent range of opportunities available for local and international institutional investors to participate in the UK real estate market.
The new partnership follows a successful period for Octopus, having recently established the £175m Greener Homes Alliance with Homes England and announced a record £462m fundraise for the firm’s UK commercial bridging strategy, Davis said.
”With specialist expertise across the residential, commercial and development sectors, Octopus is uniquely positioned to deliver upon the demand from institutional investors for high-quality, diverse real estate assets that meet a range of investment criteria,” Davis said.
Zhu Gong, European structured credit, Bayview Asset Management, said: “We welcome this opportunity to work with Octopus, whose expertise will help us gain exposure to high-quality UK small-balance CRE loans.”
Pierre Lussato, head of Bayview International, Bayview Asset Management, said: “We are very excited to partner with Octopus and help fill a financing gap in the UK real estate markets.
”We believe Octopus to be uniquely positioned to interact with asset owners through their entrepreneurial yet disciplined mindset. This will represent a further foray into non-bank lending for Bayview in Europe.”
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