REC Awards 2020: Alternative lenders make gains amid uncertainty

Managers of institutional capital sought new lending opportunities in 2020.

The march of institutional capital into European real estate debt markets continued during 2020, as a range of non-bank lenders deployed finance in a dislocated market.

Allianz Real Estate was among them, with around €2 billion of European lending. The property business of German insurer Allianz was voted Insurance Company Lender of the Year: Europe – the fifth consecutive year it has emerged victorious in this category.

The shortlist for the inaugural Fundraising of the Year: Europe award featured M&G Investments, which held a £1.6 billion (€1.7 billion) final close across three funds in June; Sweden’s Brunswick Real Estate, which secured €1.2 billion for a first close of its third Nordic credit fund; and US manager AllianceBernstein, which partnered with newly launched Lacarne Capital to come to the European market with €1.2 billion of capital.

However, the winner was Blackstone, for its Blackstone Real Estate Debt Strategies IV fund. At final close in September, it had raised $8 billion for the global fund, through which it will lend in Europe.

Strength in logistics

Blackstone Real Estate Debt Strategies was voted Debt Fund Lender of the Year: Europe, beating AXA IM Alts, DWS and Starwood Capital to the punch. The US investor provided €1.2 billion of European real estate finance during the first three quarters of 2020. Among its lending strategies since the onset of covid-19, it has built a logistics loan portfolio by providing small and medium-sized loans.

Alternative lenders proved active across Europe as they sought opportunities amid the uncertainty. London-based manager M&G was voted Alternative Lender of the Year in both the UK and Germany. In its home country, its deals included a £353 million whole loan in October to finance a central London office building and suburban London supermarket, in one of the UK’s largest non-bank finance deals since the start of the pandemic. In Germany, it provided a €168.3 million whole loan in February to Asia Pacific Land and Arax Properties to fund the acquisition of the City Campus office complex in Charlottenburg, northern Berlin.

London-based Cheyne Capital was voted Alternative Lender of the Year: France for a second year. In November, it provided a €96 million senior loan for the refurbishment of a Paris office building, bringing its French platform’s lending over the previous 18 months to €450 million.

Blackstone’s winning run continued with Alternative Lender of the Year: Southern Europe and Lender of the Year: Benelux. In Spain, it provided €165 million for the development of three build-to-rent assets in Madrid and Barcelona, while in the Netherlands, it provided €107 million to finance an affordable residential portfolio.

Small-scale lenders remain active

Below the large-scale institutional-grade lending that occupies many of the bank and alternative lenders in Europe is a thriving small-scale loan market, particularly in the UK.

The Small-Ticket Market Lender of the Year: Europe award sought to recognise this corner of the market.

The award was won by Octopus Real Estate: the London-based specialist lender provided £290 million (€315 million) of finance during the first 10 months of 2020 across commercial, residential and development loans. To date, the firm has provided £4.8 billion across 3,800 loans.