Cornerstone aims to enter German and French high-yield real estate loan arena

Fund manager Cornerstone Real Estate Advisers plans to move into high-yielding debt origination in Germany and is also targeting France by the end of the year.

The group used Laxfield Capital to set up its UK senior lending business  in 2012, with a contract that runs to the middle of this year.

Charles Weeks, Cornerstone’s European chief executive, said the US-owned firm plans to put its own infrastructure in place on the Continent.

“The high-yielding space is interesting  in Germany because senior lending is well covered with pfandbrief,” he said.

Weeks stressed that it is still early days and that company is immersed in exploring potential candidates and opportunities.

The Mass Mutual-backed firm, which also manages third-party money, is a big debt investor in the US, and Cornerstone hopes to replicate something similar in Europe.

“We’re looking to establish footprints in Germany and France, whether for equity or debt investments,”  he said.

The firm has term sheets out for more loans in the UK, following its first loan last year, an £83m, 12-year facility for Derwent London, to finance two assets in central London, at an all-in rate of just under 4%.