FINANCE: TIAA Henderson Real Estate has lined up its US partner as the cornerstone investor for its UK debt fund.
It is understood that TIAA-CREF will inject up to £100m for the first close of the whole loans and junior loans vehicle later this month.
A second close with the new investors is expected to follow in around six months. The fund’s total equity target is believed to be circa £300m.
The move means the US investor underpins both of TH Real Estate’s UK commercial real estate debt strategies that have evolved since the firm announced a move into debt in May 2012.
Alongside the planned £300m commingled fund, TH Real Estate is also managing a separate account on behalf of TIAA-CREF that is targeting longer-term, fixed-rate senior investment loans.
The firm’s head of debt, Christian Janssen, said that the fund was looking to provide whole loans and junior loans for terms of four to seven years with LTVs of up to 75%.
Ticket sizes would range from £10m to £100m, he said, although smaller loans would be considered for the “right borrower, or we could go larger if there is a syndication strategy”.
The fund will finance a wide range of core and alternative assets classes, including UK
student accommodation, and added that secondary and regional locations would also be considered.
Janssen said the firm expects to have around half of the first close deployed by the year end, and although it “wanted more regional exposure, we have been surprised at the demand from London borrowers”.
TH Real Estate’s UK debt team, which includes Christoph Wagner and Shawn Kaufman, has also made the first loan from its senior debt platform.
In July it closed a £35m, circa 60% LTV, 20-year fixed rate loan secured by shops that “form part of a dominant regional retail park and leisure park”.
The senior strategy can provide up to £200m at 65% LTVs.
