UK-based real estate investment manager PMM Group has announced plans to deploy more than £500 million (€571 million) in property loans across the UK and Ireland over the next three years.
The firm is launching a commercial real estate lending platform – PMM Real Estate Finance – with an initial £100 million capital allocation, which it is aiming to deploy shortly.
The lender will provide senior and mezzanine finance of up to 80 percent LTV ratio, for ticket sizes ranging from £5 million to £25 million. Loans will be priced from a 5 percent margin, and typical fees will be at 1.5 percent.
The company already has a “healthy pipeline” and is actively involved in several transactions across the UK and Ireland, the firm said.
The investment strategy for the new platform is focused on areas of the market where banks have retrenched and debt liquidity is weakest.
“We will invest in traditional commercial real estate, with an opportunistic view across all assets, looking at student accommodation with special interest,” the non-bank lender told Real Estate Capital.
The newly-formed division will be led by Gareth Williams and Domhnall Gaffney, who have over 30 years’ combined experience in the European commercial real estate loan market.
Prior to joining PMM, Williams and Gaffney were part of the management team at LNR Partners Europe, responsible for origination, structuring and execution of commercial real estate loans. They have previously held senior roles in the real estate finance divisions of large UK and European financial institutions.
“PMM sees a great opportunity to offer liquidity to an underserviced part of the UK and Irish markets. We aim to underwrite real estate fundamentals rather than simply cashflows, which means loans can be structured to suit borrowers’ distinct business plans,” Williams said.
“The opportunity for non-bank lenders in both markets is growing and access to debt remains challenging, especially for smaller debt amounts at higher leverage. Rather than just price, certainty of execution and high levels of customer service are becoming an increasingly important consideration.”