LaSalle Investment Management today announces the final close of LaSalle Residential Finance I. The £238 million (approx. €281 million) vehicle aims to provide developers with senior ranking whole loan financing for residential projects in London and student housing development schemes in major university towns across the UK.
LRF I offers APG access to a niche targeted market opportunity and the expertise and knowledge of LaSalle’s established UK property and European debt platform. The success of this venture could lead to a follow-on commitment, further increasing much needed debt investment in the UK property market.
Michael Zerda, manager of LRF I and European Director of Debt Investments and Special Situations said: “LaSalle Residential Finance I is the only vehicle of its size in the market today offering developers whole loan construction finance on student housing and residential development in the UK. With the traditional banking market still dealing with regulatory pressures and balance sheet pressures, this allows us to fill a clear gap in the financing market.”
“We offer loans between £15-60 million, typically up to circa 75% loan to cost, and expect to announce our first deal shortly. We have had high levels of interest from a wide variety of developers looking for non-bank sources of capital and expect this trend to continue in the medium term. We aim to make between five to seven loans in the next six months and view this as the first tranche of a long term and larger scale strategy.”
Roland Mangelmans, senior portfolio manager of APG Asset Management said: “The London residential development market and UK student housing market is characterized by an imbalance between supply and demand from a debt perspective. Simultaneously from an equity point of view APG perceives these markets as attractive, with sound fundamentals. This real estate debt strategy contributes to APG’s overall real estate debt portfolio and provides further diversification.”
Amy Aznar, head of Debt Investments and Special Situations said: “LRF is highly complementary to our existing debt strategies and enables LaSalle to offer wide ranging debt solutions to borrowers spanning acquisition finance, refinance, recapitalization, and development/redevelopment.”
LaSalle’s European debt platform provides tailor-made solutions covering a wide range of situations, which includes stretched senior and mezzanine finance, capital expenditure funding, loan acquisition funding and preferred equity investments.
Typically, LaSalle targets single loan amounts of £10 million to over £100 million and can lend on a wide variety of real estate, including investments, corporates, and development projects. Since its establishment, the Debt Investments team has closed numerous investments, with over $500 million invested to date.