“This new and unique proposition allows ING REF to leverage its origination and lending capabilities to bridge the gap in the market between capital providers looking for attractive spread products, and real estate companies seeking loans for acquisitions and refinancing,” said Peter Göbel, CEO ING Real Estate Finance Netherlands.
ING Real Estate Finance has teamed up with ING Investment Management in a partnership agreement to provide the service. They have already won a €400m mandate from Nationale-Nederlanden Life, with the potential to grow it to €750m. “We believe stepping into commercial real estate loans now is the right moment in the cycle,” said Jelle van der Giessen, Chief Investment Officer at NN Group.
“Investing in commercial real estate loans is a good diversifier for insurers, but you really need to understand the asset class well. Pension funds and insurance companies can benefit from this partnership as they can now access this market through this proposition bundled around joint skills. The combined in-house expertise ensures we get the loans that meet our investment criteria which we can properly monitor and administer.”
ING REF, one of the largest commercial real estate lenders in Europe, has a loan book of around € 25bn while ING IM manages around €2bn of commercial real estate. The investment managers believe that real estate debt is the most attractive it’s been for eight years; they expect to see significant amounts institutional capital flowing into the asset class.
Said Han Rijken, head of insurance investments at ING IM: “These loans are attractive based on the spreads and capital treatment under Solvency II compared to many of other fixed income asset classes. In addition it offers additional diversification to the fixed income portfolio.”