TH Real Estate has completed the first close of its £500m Global Real Estate Debt Partners – Fund II (UK), raising close to its total target.
The fund will target a return of 8%-9%. It is understood that TH Real Estate expects to have all the capital for the fund by the end of the year.
With capital committed from the Asia, US and European institutions, the investors were attracted by the potential for stable, income-focused returns with a low correlations to the wider property and investment markets.
Loan origination is focused on prime and strong secondary assets, as well as well-positioned regional assets in the core-plus and value-add sectors of the UK market. The fund will use a senior syndication strategy of selected whole loans in order to enhance returns and optimise its investment portfolio.
It has already agreed its first deal with a private investor with a £44m loan with a five-year term on a retail park in Basingstoke, which was acquired from Legal & General. The fund will invest in whole and mezzanine loans.
The first loan has an LTV of 75%. TH RE will sell the senior debt at a detachment point of 55%.
The successful first close of the Global Real Estate Debt Partners – Fund II (UK) follows TH Real Estate’s £350m Global Real Estate Debt Partners – Fund I (UK) and associated side-car investments. First launched in December 2014 it drew capital from the US, Germany, the Netherlands and Korea.
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