GLOBAL – Standard Life Investments will start to make real estate debt investments in the UK for first time this year, having secured £250m (€299m) in insurance capital from its parent.
The investment manager, wholly owned by Standard Life, expects to make its first senior financing deal before the end of the year as it looks to build a debt platform for the long term.
Head of real estate David Paine said the company would in time offer real estate debt investment strategies to third-party investors, but he said it was too early to confirm whether this would be in the form of separate accounts or a pooled fund.
The mandate means Standard Life is the latest UK insurer to move into the commercial property lending market, joining the likes of Aviva, Legal & General and Prudential, which invests through M&G.
Standard Life Investments has been preparing over the past two years to enter the real estate debt market.
In July, it announced the appointment of Neil Odom-Haslett as head of commercial real estate lending.
Its real estate and fixed income teams will work together on the venture.
It will start by providing senior debt on assets in the UK, but Paine did not rule out eventually widening activity to mezzanine debt and lending in Continental Europe.
London has attracted the majority of investment and lending activity since the financial crisis, but it is possible Standard Life Investments' first financing deal will be outside the capital.
Anne Breen, head of real estate research and strategy, said the biggest opportunities for lenders were potentially outside London.
She also said the commercial property recovery in the UK was no longer "London-centric" and was "moving into a new phase".
Standard Life Investments is not new to real estate lending per se, having been an active lender in Canada for several decades.
The company also announced it had raised CAD77m (€56m) in equity for a new Canadian real estate fund and has plans to increase this to CAD150m by seeking more capital from large international investors.
Standard Life Investments already manages a CAD1.3bn open-ended fund in Canada on behalf of Canadian investors.
The Canadian real estate market is widely perceived by global investors as being attractive and stable but hard to access and dominated by large domestic institutions.
Paine said he was seeing interest from large institutions that have the scale to create a "discrete allocation to Canada".