“Institutional capital with flexibility”: inside Hilco Real Estate Finance’s approach to bridging

Few real estate lenders embody the term ‘entrepreneurial flexibility’ quite like Hilco Real Estate Finance (HREF), the latest addition to the Bridging Loan Directory.

The bridging lender, which is a subsidiary of leading global asset manager Orix Corporation, is now joining the Bridging Loan Directory, and is known, according to managing director Asim Shirwani for its “institutional reliability and unconstrained flexibility”.

“The majority of our lending mirrors the composition of the wider real estate market: mainstream assets such as residential, offices and industrial. But by keeping an open mind, and leveraging the team’s understanding of underlying operational businesses, we have also lent to a range of alternative sectors – such as hotels, care homes, student accommodation, caravan parks and working farms – that historically bridging lenders haven’t been able to support,” he said. “The strength of our underwriting and stability of our capital sources means we’re able to take a different view.”

Recent examples demonstrate the breadth of HREF’s capabilities. A £30 million loan against a West London build-to-rent residential scheme sits alongside a £14 million facility for a 184-bedroom IHG-operated hotel near Heathrow Airport and a £6.1 million bridging loan for a 76-key golf and spa hotel in Merseyside. In the agricultural sector it includes a £4.66 million loan against a 1,400-acre farm in the Scottish Borders with multiple small businesses including a microbrewery, cafés and retail souvenir stores. A £10 million facility for a high-end property in Surrey and a £3.2 million loan against a 17-home rental portfolio in Lincolnshire are among other deals completed in the past few months.

HREF, which was launched in 2023, has its own premier address with a headquarters in Mayfair, London. It also, since last October, has an office in Dublin, which is already making waves in the Irish property market.

HREF benefits from the backing of its ultimate parent The ORIX Group, one of the world’s largest global investment managers with over $565bn of assets under management. Indeed, it says it is one of the best capitalised lenders in the sector.

“We write debt deals up and down the UK, Ireland and the Channel Islands,” Asim said. “These are mainly for commercial and residential real estate or operational, assets with current or future income. These are the sectors that we do most business in, but we also have the propensity and capacity to look at most deals that have a real estate angle.”

The typical loan size also dwarfs what may be categorised as standard bridging loans. “The bridging landscape is full of lenders wanting to do half a million to £5 million deals. It is very competitive at that level,” he said. “We tend to operate in the £3 million to £150 million market, with our ultimate ownership and access to capital making us a very reliable lender, something that borrowers certainly appreciate.”

Within that is the company’s new medium-term loan product, which was launched in March, in response to market demand for extended finance facilities.

The new product is now available in both the UK and Ireland, with terms ranging from 2 to 6 years, and loan sizes of between £10 million and £150 million being actively considered.

Pricing starts at SONIA + 2.95% and all loans are secured by real estate collateral at a loan-to-value ratio of up to 75%.

“We are seeing some strong demand, and there are a lot of borrowers out there excited by the offering and wanting to find out more. But we believe that there is a real desire for this in the market and only a few lenders who offer it,” Asim said. “We have a strong pipeline of deals and a constant flow of enquiries.  It’s a different ball game compared with short-term deals but the way we assess and underwrite deals is the same and is reflective of our DNA.”

Going forward Asim believes that HREF’s total loan book will have a healthy split between the medium-term loan short-term facilities. “The new medium-term product is very much ‘in addition to’ our bridging capabilities – they are very different solutions and we see growth in both areas,” he said.

The company is also growing in terms of personnel, with 11 colleagues in the U.K. and 3 in Ireland. Asim is also relatively new at the business, having joined as MD last September. He brought with him two decades experience of both mainstream and specialist lending in the bridging and short-term loan arena, most recently at Cynergy Bank, where he served as director of bridging finance and oversaw its expansion into the short-term lending market. Prior to this he held senior positions at Lendhub, Lendinvest and Metro Bank.

“We’ve had 5 people join in the last 12 months. We’re still not a big team, but that helps us be nimble. It’s all hands-on deck with all of us doing pretty much the same thing in building up the pipeline of work and getting money out of the door,” Asim said. “We don’t follow formulaic checklists — every deal is evaluated on its own merits. Whether it’s residential, retail, infrastructure, or a complex ownership structure, we bring creativity, pragmatism, flexibility and capital to the table. No sector is off limits.”

But lending across multiple real estate asset classes, dealing with large volumes of money and in areas of the UK with different regulatory environments such as the Channel Islands, specialist expertise is also needed.

“We have a good idea what is going to fly and what is not, so we can do deals quickly,” said Asim. “We have a group of originators and a team of bright, young analysts who have gained good grounding at the likes of J P Morgan, Nomura, Citi and Rothschild. When we come across deals that aren’t straightforward and require enhanced due diligence, we have the intellectual firepower to make valued judgements. This, in turn, informs quick decision making and ultimately means that our borrowers get quicker access to the finance they need. We are driven by timelines of the transaction, the borrower and other parties involved.”

Asim said the bridging market has been challenging in the last 6 to 12 months due mainly to external factors such as cost of borrowing, geo-political situations and more recently the noise around the private credit market and the Iran war. “With real estate transactions not moving as fast as they were before and externally, we might be in a wait and see phase right now, it’s business as usual at HREF” he said. “Although there are asset classes that aren’t particularly liquid at the moment, this isn’t a permanent problem. I see some beneficial impact in London with money, which may have gone to the Gulf states, coming back to the capital. I believe the UK will remain, or re-emerge if you will, as a safe and reliable haven for real estate investment.”

Being seen is also important for HREF, which is keen to grow awareness of its products and services to a wider audience. It is why it is joining the Bridging Loan Directory.

“We are still a relatively young business, but we have a good story to tell, and we want to tell it,” said Asim. “It’s a good time to take advantage of the marketing benefits of being a BLD member.”

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