Aeon Investments and WayPark Capital have entered into a £450m strategic loan origination agreement for commercial real estate lending in the UK.
This is the latest development in Aeon’s commercial real estate investment programme, which launched in Q4 2021 as part of its wider mid-market lending strategy. The programme intends to build portfolios of loans in the UK to meet the increasing interest from institutional investors in investment vehicles focused on commercial real estate. The agreement increases Aeon’s origination capabilities to over £900m and compliments an existing agreement with the private bank Arbuthnot Latham & Co.
Under the agreement, WayPark Capital, a recently launched commercial real estate lending platform, will provide commercial real estate borrowers with tailored loans and financial solutions of between £2m and £20m, with LTV ratios of up to 75% for acquisitions, refinancing, and asset upgrades.
Aeon’s commitment to the sector is supported by their recent research where they surveyed over 100 institutional investors in Europe and the US who collectively have around $574bn in assets under management. The research revealed that over the next 18 months, 63% of institutional investors interviewed expect allocations to structured credit products focusing on residential real estate to increase, and the same number also expect this from those investment vehicles focusing on commercial real estate.
Oumar Diallo, Chief Executive Officer, Aeon Investments said: “This agreement further demonstrates our belief in the commercial real estate sector, despite prevailing headwinds due to rising rate, surging inflation, and looming recessionary outlook. We firmly believe that rigorous asset selection and loans with prudent LTVs and conservative debt coverage ratios will ensure CRE debt remains an asset class with sound risk/reward ratios.
Our agreement with WayPark is an exciting development for our CRE investment programme. There are a growing number of attractive corporate real estate funding opportunities and a growing appetite from institutional investors to increase their exposure to this market.”
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