BlackRock Real Assets has raised €609 million for its BlackRock European Real Estate Debt Fund (ERED), exceeding its €500 million target.
The fund invests in junior debt secured by commercial properties primarily located in Western Europe. The fund is Euro denominated with a conservative, pan European investment strategy targeting average 75 per cent loan to value (LTV).
The fund plans to invest in offices, retail, industrial, logistics, multifamily, student accommodation and hotels.
”With EUR610 billion European commercial property loans maturing between 2018 and 2021, prolonged deleveraging in the banking sector and increased regulation, we believe the market context for European Real Estate Debt can offer alternative lenders a significant opportunity. Real estate debt has the potential to generate attractive and stable net income yield for investors in excess of traditional fixed income instruments,” said BlackRock in a statement.
“Increased regulation and tighter credit control has led to intense competition for senior debt. By comparison, relatively little capital has been raised for high yielding debt strategies. The challenge for alternative lenders is unlocking this investment opportunity and that is where the scale and reach of BlackRock’s Real Assets platform comes into its own. We are delighted with the response from investors towards this fund, it demonstrates the strength and resiliency of the strategy,” said Robert Karnes, Global Head of Real Assets Debt at BlackRock.
Anne Valentine Andrews, Global Head of BlackRock Real Assets, added: “The European Real Estate Debt Fund aims to provide investors with stable net income, and has remained an ever-popular strategy with our clients. Given the scale of the BlackRock Real Estate platform, we have the privilege of direct access to multiple origination channels, leading to enhanced sourcing capabilities and differentiated deal flow.”
BlackRock Real Assets has 20 years of history investing in Real Estate Debt. As of 30 June, 2021, BlackRock’s Real Estate Debt platform has invested USD14 billion on behalf of institutional investors across Europe and the United States.