Aberdeen Standard Investments (ASI) will soon be able to lend on property across Europe via its Commercial Real Estate Lending (CREL) platform.
CREL is in discussions with investors to establish a co-mingled, senior debt fund which would mainly originate its own loans, as the business has been doing in the UK since 2014. Neil Odom-Haslett (pictured), CREL’s head of commercial real estate lending, told PropertyEU that discussions with institutional investors are underway to set up a pan-European real estate fund with a target capital raise ‘of several hundred million euros’.
The fund will invest in senior debt, offering borrowers €15-€50 mln average tickets, and it may also have capacity for some whole loans, although Odom-Haslett said the final parameters are still under discussion. It will lend against all asset classes including hotels and – selectively – retail.
Aberdeen, which is based in London and Edinburgh, is one of a number of institutional lenders on property that are developing a growing niche alongside banks.
Legal & General Investment Management, another UK-based finance group, is expanding by taking on some very large bilateral financings for investors, like its £420 mln, 5-7 year investment facility last month for Almacantar for Southbank Place in central London.
Rothesay Life is another. As PropertyEU reported in last month’s Finance Watch section, Rothesay was picked by Korean investor NPS and its adviser Lasalle Investment Management to finance the acquisition of Goldman Sachs’ new City of London headquarters, with a circa £700 mln loan at a margin just over 115 basis points.
Meanwhile Amundi Real Assets has begun investing for clients in real estate debt, following in the footsteps of French-based peers such as AXA IMRA, Acofi and La Postale.
Odom-Haslett said ASI’s CREL had raised £2 bn of equity for senior real estate debt from five mandates in the last 12 months across fixed and floating rate strategies and all via closed-end debt fund structures. Some are discretionary and some mandates can co-invest. ‘Some investors like the granularity they get from co-investing in transactions,’ he said.
CREL also manages two mandates totaling £1 bn to make loans which are held in a multi-asset fund run by ASI called Secure Income Cashflow Fund. ASI recently started raising equity for a second multi-asset private credit fund.
All the capital comes from third-party rather than in-house mandates since ASI sold its life assurance business to Phoenix and became solely an investment manager in 2017.
‘CREL targets 3-4% gross returns’, Odom-Haslett said. ‘We focus on the £15-50 mln loan size-bracket because this part of the market is less competitive. In the UK we tend to make a lot of investments in the regional property market rather than in big shiny city buildings where pricing can be driven down.’
In Europe, CREL will tap into ASI’s existing teams which invest in direct real estate, and the UK-based loan origination team will be beefed up for the expansion.
