QuadReal Launches a £2.5 Billion Debt Platform in the UK and Europe
Global real estate investor QuadReal Property is expanding its commercial real estate debt business in Europe, with a plan to commit more than £2.5bn (€2.9bn) over the next three to five years.
In January 2023, QuadReal took its first step into the UK real estate credit sector by acquiring a stake in Précis Capital.
QuadReal, which manages a £7.5bn (€6.4bn) North American debt business, is now expanding its commercial real estate debt platform into the UK and Ireland with plans for future growth across Europe.
With this latest move, the real estate arm of British Columbia Investment Management Corporation is expected to have direct control over all decision-making.
QuadReal said, by the end of 2029, it expects to shift 10% to 20% of its total debt portfolio exposure to the UK and Europe.
The platform will focus on direct lending in the multifamily, student housing, industrial and self storage sectors with a focus on construction, transitional and stabilised loans, the company added.
Jonathan Dubois-Philips, president, international real estate at QuadReal Property, said: “Platform expansion in the UK and Europe is a natural next step for QuadReal’s debt strategy and will build off the successes of our team in North America.
“Expanding our lending capabilities in the UK and European markets provides us with the opportunity to further diversify our portfolio and gain exposure to the attractive risk-adjusted returns these markets have to offer.”
Prashant Raj, managing director, debt investments at QuadReal Property, said: “In alignment with QuadReal’s high conviction investment strategy and global experience, the expanded platform will focus on key sectors including multifamily, student housing, data centres, industrial and self storage.
“The initial commitment strategy is centred on the UK and Ireland, and will expand more broadly in Europe, with a focus on construction, transitional and stabilised loans, filling a current gap in the lending market.”
On Monday, QuadReal issued a press release stating it is launching a £2.5 billion debt platform in United Kingdom and Europe:
QuadReal Property Group (QuadReal), a global real estate investment, development and operating company has expanded its commercial real estate debt platform in the UK and Ireland. Over the next three to five years, QuadReal intends to commit over £2.5bn, signalling the firm’s conviction to the UK and Ireland, with an eye to further expansion into other European markets. QuadReal will have direct control over all decision making.
The expanded platform, focused solely on direct lending, follows the success of QuadReal’s North American debt business, which currently manages over £7.5bn in investments and is expected to exceed £8bn by the end of 2025. The expansion will leverage the experience and connections of QuadReal’s established London office and global team as well as QuadReal’s strong relationships with both US and Canadian-based institutional sponsors who are active across the UK and Europe.
“Platform expansion in the UK and Europe is a natural next step for QuadReal’s debt strategy and will build off the successes of our team in North America,” said Jonathan Dubois-Philips, President, International Real Estate. “Expanding our lending capabilities in the UK and European markets provides us with the opportunity to further diversify our portfolio and gain exposure to the attractive risk-adjusted returns these markets have to offer.”
“In alignment with QuadReal’s high conviction investment strategy and global experience, the expanded platform will focus on key sectors including multifamily, student housing, data centres, industrial and self storage,” said Prashant Raj, Managing Director, Debt Investments. “The initial commitment strategy is centred on the UK and Ireland, and will expand more broadly in Europe, with a focus on construction, transitional and stabilised loans, filling a current gap in the lending market.”
QuadReal’s investment strategy, global experience and local market expertise have established it as one of the top 20 real estate investors globally. Since 2021, QuadReal’s debt team has completed over 165 deals concentrated on high conviction sectors. By the end of 2029, it aims to shift 10% to 20% of its overall debt portfolio exposure to the UK and Europe.
FAQ
Why is QuadReal expanding its platform in the UK and Europe?
Since 2021, QuadReal’s global debt business has grown significantly and in North America, the team has completed over 165 deals in high conviction sectors. Expanding its lending capabilities in the UK and European markets provides QuadReal with the opportunity to diversify our global debt portfolio and gain exposure to attractive risk adjusted returns.
What areas will the team initially be focused on?
The platform will focus on direct lending in the multifamily, student housing, industrial and self storage sectors with a focus on construction, transitional and stabilised loans. Over the next five years, QuadReal intends to commit over £2.5bn in the UK and Ireland and will explore expanding the platform into other European markets in the future.
How much UK and European exposure is QuadReal planning for the global platform?
By 2029, QuadReal aims to have 10% to 20% of its overall debt portfolio exposure in the UK and Europe.
How does this relate to QuadReal’s global investment strategy?
The sectors and markets where we lend are in direct alignment with our global investment strategy. QuadReal has high conviction in multifamily, student housing, industrial and self storage and focuses on investment opportunities in markets with favourable demand drivers.
About QuadReal Property Group
QuadReal Property Group is a global real estate investment, development and operating company headquartered in Vancouver, British Columbia. Its assets under management are $94 billion. From its foundation in Canada as a full-service real estate operating company, QuadReal has expanded its capabilities to invest in equity and debt in both the public and private markets. QuadReal invests directly, via programmatic partnerships and through operating platforms in which it holds an ownership interest.
QuadReal seeks to deliver strong investment returns while creating sustainable environments that bring value to the people and communities it serves. Now and for generations to come.
I'm going to be very quick with my comments.
QuadReal, BCI's real estate subsidiary, is one of the best real estate outfits in the world and this expansion into UK and European real estate debt is a natural expansion of their activities in North America.
To understand QuadReal's global activities, you need to upload their global asset pools here (see below):
It clearly states:
Our financing strategy aims to optimize our overall cost of financing and broaden and increase our financing capacity by creating distinct credit pools with assets of similar characteristics. We finance our investments through these various credit pools ranging from high-investment grade rated to unrated entities in addition to utilizing unsecured and secured sources.
There is also a section on real estate debt investing on QuadReal's website here where is clearly states their approach: "A high conviction investment strategy across major markets where we work with quality borrowers to finance institutional assets."
They will be deploying funds to lend across three main asset types:
- Residential (multifamily)
- Industrial (logistics properties)
- Alternatives (self-storage, data centres, student housing, medical office, and cold storage)
Basically, the same high conviction areas where they were focusing on real estate debt financing in North America are where they will be focusing their activities with this new UK and European platform.
The IPE Real Assets article at the top of this post states:
In January 2023, QuadReal took its first step into the UK real estate credit sector by acquiring a stake in Précis Capital.
QuadReal, which manages a £7.5bn (€6.4bn) North American debt business, is now expanding its commercial real estate debt platform into the UK and Ireland with plans for future growth across Europe.
I basically foresee the same success with this new platform as with their North American platform, they will be working with top strategic partners to finance their real estate activities in high conviction assets.
Below, once again, watch a recent interview where Jay Kwan, Managing Director and Head of Europe at QuadReal Property Group, joined Matthew Watts on the People Property Place Podcast to discuss strategy and more (I recently covered it here).
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