M&G Investments has financed a £517m (€579m) loan to India’s Lodha for its Grosvenor Square development in London.
The entire credit sum has been invested and is held by funds managed by M&G, the firm said.
The loan is being made to Lodha UK, the London-based arm of India’s largest real estate developer, for its residential development of No. 1 Grosvenor Square in central London.
Dan Riches, director of real estate finance at M&G Investments, said: “M&G’s direct origination model gives our institutional investors direct access to prime real estate such as No. 1 Grosvenor Square.”
He said M&G’s ability to invest and hold large loans on the most complex deals had been shown to be attractive to borrowers, which gave it more more opportunities to create value for its investors.
“Private credit investments have become increasingly sought after by institutional investors seeking higher returns than are available in more liquid markets,” Riches said.
When complete in December 2019, the upmarket Grosvenor Square development will include 48 homes.
Lodha bought the site in 2014, and received planning consent for the redevelopment from Westminster City Council in 2015.
The square is in the process of development, M&G said, with the former US Embassy at the western end of the square set to become a hotel operated by the firm Rosewood.
In May, Lodha UK raised $375m (€318m) of construction funding for its Lincoln Square residential development in the UK capital from private investor Cain Hoy.