Barings backs German Corestate’s UK debut

Barings Real Estate Advisers has provided finance to support Frankfurt-based property fund manager Corestate Capital’s maiden investment in the UK market, Real Estate Capital has learned.

The private debt provider, which lends on behalf of a segregated mandate from its US parent, MassMutual, has arranged a £29.65 million (€34.7 million) loan to fund Corestate’s £48 million acquisition of the historic Royal Liver Building in Liverpool from the Royal London Mutual Insurance Society.

While Corestate is among the most active European real estate investment management firms, with approximately €16 billion of assets under management across 26 offices, the Royal Liver Building deal was its first foray into the UK market.

The 328,800 square feet grade A office building, originally completed in 1911, is the headquarters of the Royal Liver Assurance Group. It is a key feature of Liverpool’s waterfront along the River Mersey, which is designated as a UNESCO world heritage site and prior to the sale to Corestate it had never been brought to market.

Thomas Landschreiber, Corestate’s chief investment officer, pledged in an announcement on the purchase that it would “invest substantial funds in order to preserve and strengthen” the property over time.

The property has already undergone an extensive refurbishment in 2008 to ensure its space was sufficiently modern to house tenants including BESTINVEST, HSBC, Mott MacDonald, Pershing, Princess Limited and Universities Superannuation Scheme.

“This iconic deal is a strong endorsement of the flexibility of our European debt platform, as we continue to work with a wide range of investor and borrower requirements across both senior and structured debt in the European markets,” said Chris Bates, head of real estate core mortgage Europe at Barings Real Estate Advisers.

Formerly known as Cornerstone Real Estate Advisers, MassMutual brought the firm under the Barings brand last year alongside three other group companies; Babson Capital Management, Wood Creek Capital Management and Baring Asset Management Limited.

Barings Real Estate Advisers invests in real estate debt on behalf of a separate account from MassMutual. The firm has provided £1 billion of property debt since 2013, with £380 million written last year. The firm typically provides whole loans up to 75 percent loan-to-value.