LaSalle raises close to £600m for RE debt strategies

LaSalle Investment Management has raised almost £600 million across two funds for its European real estate debt strategies platform.

The firm’s European debt investments and special situations business, which is headed by Amy Aznar, has raised £264 million for its third residential finance fund, with £334 million raised so far for its mezzanine and whole loan fund, LaSalle Real Estate Debt Strategies III.

In the first of the raisings, LaSalle said that the £264 million of new commitments for its LaSalle Residential Finance III fund has extended the LaSalle Residential Finance programme, which has APG as its largest investor, to £704 million.

In line with the first two funds in the series, LRF III will focus on lending on assets in the UK, intended to be developed or redeveloped as student housing, residential accommodation, hotels or healthcare-related property. The vehicle provides whole loans of up to 80 percent loan-to-cost, ranging in size between £15 million and £100 million, with the capacity to go higher.

The first two funds have invested almost £500 million since 2013, including a £110 million whole loan to Telford Homes and Business Design Centre in Q3 2016 to fund the City North development, a mixed-use scheme anchored by 355apartments in London’s Finsbury Park.

Meanwhile, the £334 million of aggregate commitments raised for LaSalle Real Estate Debt Strategies III – its most recently-launched debt fund – is expected to eventually be increased above the £600 million raised for its predecessor fund. LREDS III invests primarily in the UK, but can also invest across western Europe and the Nordics.

LaSalle said that the fund’s strategy is to focus on lending against quality assets with “best in class” sponsors to generate risk-adjusted returns across mezzanine and whole loan investment opportunities.

LREDS III has already extended a £38 million, five-year mezzanine facility to finance the acquisition of a UK portfolio with an aggregate purchase price of £191 million, sponsored by clients of BMO Real Estate Partners. The portfolio is composed of three assets encompassing 853,000 square feet of real estate, including a department store in the city centre of Manchester and two retail parks; Clifton Moor Retail Park in York, anchored by Tesco, and Westgate Retail Park in Wakefield.

“We have been very active across the debt lending space, where we are able to offer borrowers a broad range of debt solutions,” said Aznar.

“The team has built on a successful 2016 with a strong first half of 2017, and continued fund raising for LREDS III and an extension of the LRF programme. As a result, our funds strengthened their positions as well-established lenders in the market,” she added.

Since 2010, LaSalle has committed £1.8 billion of investments in 47 individual transactions and secured against £8.6 billion worth of real estate.