MetLife steps up finance for London prime real estate
Schroder Property has secured an £85m (€102.2m) credit facility for its West End of London Property Unit Trust from Metlife – the first time the fund manager has sought and secured funding from an insurer according to IP Real Estate.
The fund manager, which has €11bn in assets under management, will tap the facility to fund new acquisitions for the office-dominated fund and add value to existing assets.
The Schroders Property deal announced this week comes after a year in which US insurer MetLife stepped up its UK senior lending activities in response to banks’ effective withdrawal from lending in the market.
MetLife Investments regional director Paul Wilson said the insurer would continue to boost lending in the UK this year.
While the focus on the capital will remain on prime office, it is also looking at retail, warehouse and hotel properties.
The insurer, which has a global commercial mortgage portfolio worth $40bn (€31.2bn), originates and holds commercial mortgages on its books for the full term, rather than securitising them.
Wilson told IP Real Estate by email that the insurer saw the London market, where MetLife has been active for the past 10 years, as an important part of its business.
But he acknowledged that it would face stiffer competition in the European market as insurers became more active in real estate lending.
European insurers such as Aviva, which last week agreed to lend £120m to a joint venture between UK property firm Shaftesbury and an umbrella group of charitable trusts, have in recent months increased their lending activity enough to raise the prospect that insurers will overtake banks as primary senior real estate debt providers.
“We expect increased activity in the European real estate sector over time, and we believe that would be healthy for the market as a whole,” said Wilson.