TH Real Estate has struck a deal with two South Korean insurance companies to invest in UK commercial real estate debt.
The investment management firm will provide whole loans in the UK market on behalf of Dongbu Insurance Company and Dongbu Life Insurance Company. The arrangement is the two insurance firms’ first separate account in the UK debt space.
The two insurers are subsidiaries of Dongbu Group, a conglomerate with interests in industry, chemicals and shipping as well as insurance and financial products. Dongbu Insurance was South Korea’s first public auto-insurance company and is one of the country’s largest non-life insurers. Dongbu Life was launched in 1989 and is one of South Korea’s major life insurance providers.
TH Real Estate already manages a segregated account for its parent company, TIAA, which provides fixed-rate loans of up to 30 years. Through the mandate, the firm typically provides loans of up to 65 percent loan-to-value secured on institutional-grade property.
TH Real Estate’s debt platform, which was established in 2014, also has a UK-focussed CRE debt fund which provides whole loans and mezzanine finance up to around 75 percent LTV.
“The UK remains an attractive investment destination for CRE debt, with a positive and stable commercial real estate risk-return profile, supported by a liquid and transparent marketplace, and a creditor-friendly and well-understood legal framework,” commented Christian Janssen, head of debt at TH Real Estate.