Investment Management鈥檚 residential finance fund, backed by APG, has widened its strategy and provided a 拢50m (鈧�63.8m) loan for the revamp of a hotel in Cambridge.
The 拢440m LaSalle Residential Finance I fund has so far financed residential and student-housing schemes, the two sectors initially targeted by the fund when it was launched in May last year.
Dutch pensions group APG backed the strategy with an initial 拢238m commitment before providing a second tranche this year, taking the fund to 拢440m.
Amy Aznar, LaSalle鈥檚 head of debt investments and special situations, said the decision to now enter the hotel sector and lend to Melford Capital Partners was an easy one, pointing to increased opportunity.
鈥淲e started to see interesting deals coming across our desk and we feel there鈥檚 a lot of opportunity in the sector,鈥� Aznar said, adding that hotels were aligned closely to the residential and student housing sectors.
鈥淗otels help diversify the fund and are certainly going to be a component of its portfolio,鈥� she said.
The fund has typically offered loans to developers looking for non-bank sources of capital between 拢15m and 拢60m up to 75% loan-to-cost.
鈥滻n the wider debt market, margins have come in this year, but we鈥檙e still able to obtain attractive risk-adjusted returns for our investors,鈥� Aznar said.
There was comparitively less liquidity amongst lenders for development finance compared to the wider real estate finance market.
鈥淚t鈥檚 a more normalised, sustainable lending environment compared what we鈥檝e seen in the last three years,鈥� she added.
Last year, APG Asset Management senior portfolio manager Roland Mangelmans, said the Dutch investor saw potential in both the London residential development market and the UK student housing market, 鈥渃haracterised by an imbalance between supply and demand from a debt perspective鈥�.
