UK-based development finance provider Maslow Capital has acquired a £100 million (€112.7 million) performing loan portfolio, representing the firm’s first participation in the secondary debt market.
The deal, which Maslow co-founder Ellis Sher told Real Estate Capital was an “opportunistic” buy, could be followed by the purchase of a similar portfolio, which is currently under consideration.
“We suspect that, as certain portfolios mature and pressure builds between duration of the capital that funded those deals and their underlying loan redemption dates, we will see further opportunities,” Sher explained.
The portfolio is secured against a mix of planning, residential, purpose-built student accommodation (PBSA) and mixed-use development schemes. It will deliver more than 438,000 square feet of new residential, mixed-used and PBSA units.
Assets are located across regional markets in the UK and are in line with Maslow’s strategy of targeting key regional cities, the firm said.
“This acquisition represents an exciting opportunity for Maslow, enabling us to gain further exposure in target markets across the UK, reinforcing our capability across residential, mixed-use and the PBSA market, in which we see particular growth potential going forward,” Sher said.
He added that the risk/return profile of the portfolio meets Maslow’s targeted return on capital, which made it a “natural purchase” for the firm. Although Maslow will likely make further acquisitions of this nature, the firm’s main source of origination will continue to be direct, Sher noted.
Demand for Maslow’s senior debt and stretch senior debt products have been growing, the firm said. In January, the lender completed four residential and student housing deals totalling £74 million, in a move to diversify its loan book.
“It is particularly encouraging to see the continued growth in demand in key strategic regions of the UK, where we see further opportunities moving into 2018,” Sher said at the time.