Specialist UK property lender Octopus Property has raised £115 mln (€130 mln) at first close for its Commercial Real Estate Debt Fund II (CREDF II), an institutional debt strategy focused on the UK commercial property market.
CREDF II is targeting £200 mln at final close, which will provide sufficient funding to complete loans with a combined value over £500 mln over the next three years.
The fund launch follows the deployment of CREDF I, a £130 mln vehicle launched three years ago, and CREDF-S, a £35 mln fund raised from existing investors in 2016 due to sustained institutional demand.
The two funds have completed over £420 mln of lending, secured against commercial real estate across mainland UK. CREDF I has returned a gross IRR of 12.6% to June 2017.
'From a borrower’s perspective, we provide loans that are more versatile than traditional bank finance and cheaper than private equity. From an investor’s perspective, CREDF I has been able to deliver returns that are comparable to equity funds, but with stronger downside protection,' commented Ludo Mackenzie, head of Commercial Property at Octopus Property and manager of the Commercial Real Estate Debt Funds.
Simba Capital is acting as Placement Agent and Macfarlanes is providing legal support for the Fund.
Octopus Property (formerly Dragonfly Property Finance) has completed over £2.6 bn of lending across 2,600 loans since its launch in 2009.
