Distressed loan sales gather pace

Reports that the Chinese Investment Corporation (CIC) is partnering with Blackstone to buy a stake in Project Isobel, a property loan portfolio being sold by the Royal Bank of Scotland is 'really good news' for the market, according to Hans Vrensen, global head of research at DTZ.

CIC, which also owns a 10% stake in the private equity firm, is believed to be making an investment of about £50 mln in the £1.4 bn (€1.6 bn) portfolio. The report was followed days later by an announcement by Kennedy Wilson, the New York-listed real estate investment and services firm, that it is leading a consortium of institutional partners that bought a loan portfolio from Bank of Ireland for $1.8 bn (€1.3 bn).

A majority of the loan portfolio assets is secured by high-quality, London-based office, multi-family and retail properties. Both distressed loan portfolios are being acquired in conjunction with institutional investors, Vrensen pointed out. 'It is completely new for institutional investors to be active in this market. Clearly, institutional investors are struggling to find large prime assets in core markets. Teaming up with advisers like opportunity fund managers or other experienced people who know what they’re doing could be an emerging trend.'

The full article appears in the November edition of PropertyEU Magazine. Click on the link below to subscribe and to order your copy now.