Aeriance launches London resi debt fund
By Paul Norman - Friday, January 27, 2012 11:50
Aeriance Investments, the independent investment firm, has launched OREL, a £100m closed-ended specialist debt fund which will provide access to bridging loans for residential property transactions in London.
The fund aims to deliver “superior risk adjusted returns to investors”.
OREL has been created to capitalise on what it terms the “current dislocation in the short term real estate lending sector in the UK and will provide two to three year financing to experienced property entrepreneurs and High Net Worth Individuals for senior and junior financings in the London area”.
Typical assets will include high-end residential properties in prime locations such as Belgravia, Knightsbridge and Mayfair, which can command values of around £20m and which have continued to show resilience throughout the economic downturn.
Aeriance is anticipating growing the unleveraged fund to circa £200m with commitments from a range of UK and international investors and is expecting to deliver a net return of between 10 - 12% pa.
Daniel Bendavid, senior investment officer, Aeriance Investments, said: “The UK residential real estate lending market is still characterised by a dislocation which has been created by a significant lack of liquidity from financial institutions. We anticipate that this environment will continue for the forseeable future as new lending volumes from banks will probably remain expensive and severely limited, driven by new capital adequacy rules.”
The launch of OREL forms part of Aeriance’s three year track record in real estate lending, which has involved underwriting over €700m of loans.
pnorman@costar.co.uk