European real estate manager Palm Capital has acquired a £150m (€170m) sub-performing UK loan book from Lone Star.
Palm Capital said it has acquired the loan book of Project Falcon, which is secured against a portfolio of 80 UK commercial real estate assets.
Project Falcon’s underlying portfolio is well diversified by asset class with 49% of high street retail and long let retail warehouses, 12% leisure, 15% logistics and 21% offices.
The loan book, which was part of the Project Churchill portfolio, has an average maturity of over 8 years.
Palm Capital said it has identified this opportunity to gain an interesting exposure to the regional UK market, ”which offers a superior risk-return profile, a strong income yield and upside potential”.
Reda Khatim, managing director at Palm Capital, said: “This transaction highlights Palm Capital’s strength in capitalising on special situations across the risk spectrum. We were particularly attracted to the long duration, largely performing nature of this loan book, which provided a superior risk-return exposure and a high degree of protection.
“Furthermore, this transaction also leverages our in-depth historical experience in acquiring distressed situations combined with our strong asset management expertise.”