LaSalle sees strong start to the year for specialist debt investing
LaSalle Investment Management has completed more than GBP150m of subordinate debt investments since the beginning of 2012 in six separate transactions – as a result LaSalle UK Special Situations Fund I is almost fully invested according to Property Funds World.
LaSalle has a robust pipeline of further debt investment opportunities set to close over the coming months and is confident that the trend for companies seeking non-bank sources of capital will continue in the coming years, as GBP120 billion of UK real estate debt matures in the next 36 months. Over the past two quarters, LaSalle has seen a significant increase in deal activity driven by a combination of factors including increased regulatory constraints on banks, the continued presence of highly levered legacy positions on banks’ balance sheets and the determination of banks to shed risk weighted assets.
LaSalle has been one of the most active players in the market, having raised over GBP400 million of discretionary capital for junior and mezzanine debt investment in 2010 and 2011.
Amy Aznar, Head of Special Situations and Structured Investments, LaSalle Investment Management said: “We are able to offer long-term sustainable financing options to owners of real estate and in recent months we have seen a flurry of activity. We are very pleased with our investments this year and in particular the high quality of both real estate and sponsorship underpinning our loans. We anticipate big opportunities over the next three to five years for specialist debt finance providers with deep real estate platforms and structuring capabilities.”
Michael Zerda, Director, Special Situations, LaSalle Investment Management says: “We believe current market factors have created a unique environment for real estate debt investments to generate a combination of high level of current income and more attractive relative risk adjusted returns than is usually possible through direct equity investment. Our focus will remain on quality sponsorship and fundamental real estate value assessment that is capable of adapting to a fluctuating market”.
LaSalle’s debt strategy was set up in 2010 to provide tailor-made solutions covering a wide range of situations in which a sponsor may need additional financing, which also includes stretched senior and mezzanine finance, capital expenditure funding, loan acquisition funding and preferred equity investments. Typically, LaSalle is targeting single loan amounts of GBP10 million to GBP75 million over a three to five year term.