US-based Pricoa Mortgage Capital has closed a £70m (€87.5m) commercial real estate loan in the UK, the first financing in the company’s new European initiative.
The company has allocated €400m of long-term, fixed-rate senior debt to lend in this year alone, “with the ability to do significantly more than this,” the firm said.
The 11-year loan to London-headquartered private company O&H Group, chaired by David Gabbay, is secured by a portfolio of four multi-tenanted office properties in central London and a grocery-anchored retail property in Bath.
Pricoa, the commercial mortgage lending business of Prudential Financial, launched its European business with the opening of its London advisory office in January 2012. Its European programme is similar to loan structures the company provides in the US, and will involve funding individual transactions of significant size with all debt to be denominated in local currency and secured by income-producing real estate. Deals in continental Europe may be structured in collaboration with local banks, the company said.
Initially Pricoa is focusing on offices, logistics, multifamily, and retail properties in and around large population centres such as London, Paris, and Germany’s major cities.
“The diversification we can achieve by investing a portion of our portfolio outside of the US, whether it’s Europe, Japan, or Mexico, is very valuable,” said Thor Orndahl, a Pricoa managing director overseeing the non-US mortgage platform. “The current market dislocation has provided the opening we have been looking for, and our plan is to be active in Europe for many years to come.”
