Aeriance Investments S.A. ('Aeriance') the independent investment firm announces the launch of OREL (the 'Fund'), a new £100 million (119 mln.) closed ended specialist debt fund which will provide access to bridging loans for residential property transactions in London whilst delivering superior risk adjusted returns to investors.
OREL has been created to capitalize on 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 £20 million and which have continued to show resilience throughout the economic downturn.
Aeriance is anticipating growing the unleveraged Fund to circa £200 million with commitments from a range of UK and international investors and is expecting to deliver a net return of between 10-12% per annum.
Commenting, Daniel Bendavid, senior investment officer, Aeriance Investments, said: "The UK residential real estate lending market is still characterized 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 foreseeable future as new lending volumes from banks will probably remain expensive and severely limited, driven by new capital adequacy rules. This, combined with a number of traditional lending institutions having to wrestle with ongoing legacy lending issues has provided us with a strategic opportunity to design a product aimed at top end residential which will help to facilitate transactions whilst providing an innovative vehicle for investors who are looking to obtain a risk adjusted return through property investment."
The launch of OREL forms part of Aeriance's three year track record in successful real estate lending, which has involved underwriting over 700 million of loans.
Source: FTI Consulting