LaSalle Investment Management has made a loan for its residential debt fund and says it anticipates “an uptick” in lending opportunities in the wake of Brexit.
LaSalle Residential Fund II (LRF), which is almost fully invested, has extended a £110 million development facility for a scheme at Finsbury Park in Islington, north London.
LaSalle was previously lined up to finance the project, which is called City North, in 2014 . But the earlier financing fell through last year when the original developer, United House Developments, opted to sell a package of developments to Telford Homes rather than trying to raise more equity to build them out.
Telford Homes is now developing City North along with local Islington company Business Design Group.
The new debt package will fund 355 private flats, 47 affordable homes and 107,000 sq ft of commercial space including a cinema, in four blocks next to Finsbury Park underground station.
Telford Homes’ chief executive, Jon Di-Stefano, said LaSalle had “remained committed” to the project since 2014. Development finance for central London residential projects has become harder to source and is more expensive than it was last year.
LaSalle is currently fund-raising for a follow on, third fund in its LaSalle Real Estate Debt Strategies series (LREDS). LREDS III will invest in mezzanine and whole loans in the UK and Western Europe.
Amy Aznar, head of debt and special situations at Lasalle Investment Management said that the demand for its loans continues to be strong. “We anticipate an uptick in lending opportunities in the wake of the Brexit vote and we believe that the UK will present compelling debt investment opportunities over the medium term horizon,” she said.
Since the Brexit vote to leave the European Union, borrowers and lenders say that banks in particular are being more cautious about new lending, although they are open for business, potentially leading to more opportunities for non-bank lenders, lower deal volumes notwithstanding.
The LaSalle platform has invested about £1.8 billion in UK and European debt since it was launched in 2010 with £750 million invested in the last 18 months.