LaSalle Residential Finance I increases investor commitments to £440m (€528m)
2 June 2014 - Following the successful launch of LaSalle Residential Finance I in May 2013, LaSalle Investment Management today announces a second tranche of commitments totalling £202m which takes the capital committed to the venture to £440m.
The venture, which has APG as its largest investor, continues to focus on refurbishment and development finance on residential schemes in London and student housing developments across the UK.Michael Zerda, fund manager of LRF I and European Director of Debt Investment and Special Situations said: “This niche target area remains an attractive funding gap opportunity and our investors’ increased commitment is a testament to the strength of the pipeline and quality of the existing portfolio. The increased commitment was carefully considered to allow for flexibility ahead of continued credit and investment market evolution. Our focus remains on high quality student accommodation and residential schemes across the UK, both for conversions of existing properties as well as ground-up development.”Roland Mangelmans, senior portfolio manager at APG Asset Management, said: "The first tranche of commitments has been successfully deployed within a short time frame. With this first tranche we have provided whole loans for high quality project developments in strong locations. Although this is a much focused strategy, the pipeline of deals and the quality of the deals is large and attractive from a risk return perspective. The fact that a large number of banks have withdrawn from the project development finance market has created an opportunity for us to fill the resulting and still very much existent ‘gap’. We are confident our increased commitment will ramp up the lending power of LRF in order to maintain its strong market position”. Amy Aznar, head of Debt Investments and Special Situations said: “The increased commitment to LRF enables LaSalle to continue to offer its borrowers debt financing solutions across a broad spectrum ranging from construction finance to mezzanine, stretch senior and whole loan finance. This brings LaSalle’s current capital available for a wide range of debt strategies to over £1bn.”LRF I’s original £238m in commitments have now been fully allocated and LaSalle expects to announce the first transaction for the increased vehicle shortly. The vehicle plans to lend at loan-to-cost ratios of up to 80% and issue loans between £15m to £60m. It offers “stretched senior” or whole loans, which make up a blend of senior and mezzanine debt in a “one-stop shop” format which the venture intends to hold to maturity. LaSalle’s debt and special situations group provides tailor-made solutions covering a wide range of situations, which includes stretched senior and mezzanine finance, capital expenditure funding, loan acquisition funding and preferred equity investments. Typically, the team targets single loan amounts of £10 million to over £200 million (€10 – 250 million) for a term of three to seven years. Over the past two years it has closed over 25 investments across the capital structure including senior, mezzanine, and equity, with over £800 million (€1.0 billion) of capital deployed to date secured against over £3.2 billion (€4.0 billion) of real estate.