US asset manager TIAA-CREF is venturing into European real estate lending.
US asset manager TIAA-CREF is venturing into European real estate lending.
'We are in the throes of setting up a UK programme which we will hopefully extend to Europe,' said Thomas Garbutt, senior managing director and head of Global Real Estate, during a panel session at the ULI Europe annual conference in Paris on Wednesday.
Garbutt said he currently saw advantages in the European real estate debt space and the dislocation in the market. 'I don’t see the debt situation rectifying itself anytime soon. A window of opportunity is coming to the market.'
The US asset manager joins a growing number of new real estate lending platforms in Europe. Earlier this year ICG-Longbow announced it had raised €120 mln from the flotation in London of its UK senior secured debt investment property vehicle while in December Starwood Capital raised almost €300 mln from the IPO of its European debt platform.
TIAA-CREF already has a presence in London and parts of Europe following a string of direct property investment transactions in the past couple of years. Some of the largest have been in Germany.
In April last year TIAA-CREF and German retail specialist Mfi formed an 80-20 joint venture to acquire the Gropius Passagen shopping centre in Berlin for €341 mln. In the last quarter of 2011 TIAA-CREF purchased the shopping centre Perlacher Einkaufsparadies, known as PEP, for €415 mln. The price reflected an initial yield of 4.6%, a record low for German shopping centres deals at the time.
TIAA-CREF has $50 bn (€37 bn) tied up in real estate, with $20 bn of that figure allocated to equity investments. Real estate debt, including mortgages and CMBS, account for the remainder Garbutt said. The asset manager also invests on behalf of third parties.
