Alicia Villegas
The rising popularity of real estate debt generates M&A opportunities, but the lack of independent debt fund businesses limits the scope for consolidation.
In the face of headwinds including Brexit, rate rises and high street woes, these trends show there is still a strong appetite to provide debt.
The real estate investor has injected £400m of capital into the UK specialist lender.
Aareal Bank has financed a pan-European portfolio in the latest large financing deal in the sector.
The German bank recorded €4.2bn of new real estate lending in the first half of 2018.
The German bank has posted an overall 24% year-on-year drop in new business as it maintains a ‘selective stance’ in financing markets.
BAML’s Devonshire Square transaction in London comes amid widening pricing in the securitisation space.
Last week’s UK interest rate hike is not an immediate cause for concern in the real estate debt market, but the gradual shift in monetary policy is a headwind.
The asset manager has already raised £200m for its second real estate lending vehicle, providing mid-market whole and mezzanine loans in the UK and Western Europe.
The bank has written a £61m debt facility for Chancerygate.