Asset manager QSix is expanding its offering to include ground-up commercial developments, as it prepares to deploy £300m into lending deals in the next 12 months.
Having previously focused solely on standing and leased assets, QSix said it will back “best-in-class” developers of prime products, particularly in the logistics and living sectors, given the “lower complexity” in each.
The company is targeting deals of up to £75m for lower-height buildings, greenfield or cleared sites with full planning permission.
The move comes amid a turbulent time for the economy with interest rates rising and inflation proving stickier than previously forecast, raising the spectre of stagflation.
Gareth Williams, head of real estate finance at QSix, said the company is a big believer in the downsize market as investment volumes begin to cool.
He added: “Providing development finance is a way for our investors to access exposure to prime real estate while achieving materially better risk-adjusted returns versus funding the same asset when stabilised.
“Prime properties with positive ESG credentials in sectors supported by strong underlying macro trends will, we predict, be more liquid than secondary assets in a wider market downturn.
“The current dislocation in the market may well provide developers with the opportunity to purchase land at less inflated prices, providing better profit on cost metrics. This is also a benefit for any lender providing a greater capital buffer.
“We believe there will be opportunities for QSix to support developers across the industrial, logistics and living sectors in the UK.”
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