Investec Real Estate (“Investec”), a leading provider of residential and commercial finance to corporate, institutional and private clients, announces that it provided £1.2 billion of senior finance, across 85 loans, in the 12 months to 31 March 2022. The record performance demonstrates the ongoing demand from UK real estate borrowers for flexible financing solutions from experienced lenders and the outperformance of the asset class despite unprecedented macro-economic challenges.
The £1.2bn comprised £524 million of investment finance and £472 million of development finance, with a slight weighting towards commercial real estate (55%). During the period, Investec has lent against numerous high-quality real estate schemes, in an increasingly diverse mix of use classes, including residential for sale, Build to Rent, mid box logistics, purpose built student accommodation (PBSA), office, mixed use and retirement living.
30 year track record underpinning high residential sector conviction: Closed £400 million of residential for sale and BTR lending, including arranging a record £170 million investment loan for Greystar’s Sailmaker’s BTR scheme and a first modular construction deal, aligning with Investec’s commitment to funding sustainable real estate schemes.
Record lending for private client team: Provided over £500 million of financing, across 60 loans; more than double than in 2020/21. 30% of new loans were to new clients, with the remainder to established clients on repeat business. Most of the new lending was in London and the South East, targeted at residential development finance but also supported Investment clients on both residential and commercial loans. Some highlights include a £40m repositioning loan on a Central London mansion block, £25m for a UK wide GP surgery portfolio, a £35m residential development loan in St. Albans and a £35m student housing development loan in Bermondsey.
Increasing ability to structure club finance deals: Leveraging its deep sector expertise and strength of its counterparty relationships, Investec coordinated over £208 million of syndicated real estate debt finance. This included arranging £85 million of the abovementioned BTR loan and selling down a third of a PBSA facility to Leumi UK, the London-based subsidiary of one of Israel’s largest banks, as well as providing syndicated financings for our Offshore Real Estate clients. Overall, Investec has syndicated nearly £600 million.
Increasingly high quality projects and clients: The average loan size during the period was £14 million, up from £8 million last year.
Continued differentiation via its holistic real estate platform: Offering alternative funding options, such as equity funding, usually alongside senior debt; portfolio lending to include both investment and development risk; and NAV facilities for fund clients in partnership with the Investec Fund Solutions team.
Mark Bladon, Head of Investec Real Estate, commented:
“Originating £1.2 billion of committed finance across our three client segments of Corporates, Private Clients and Offshore is a phenomenal achievement. Considering the backdrop, first with Covid and now the uncertain geo-political situation, as well as the increasing number of market entrants, makes it even more impressive. With a deep understanding of operational real estate built up over nearly 30 years, the support of the wider bank, and a global client base, we continue to grow our market share, without compromising on loan terms. Whilst we will exercise caution in the face of a higher inflation and interest rate environment, we expect structural undersupply in almost every sub sector and supportive demographic trends to drive increasing demand.”