UK-based property fund manager and investor First Property Group has launched a senior loan making platform for the financing and refinancing of commercial property.
”With interest rates increasing and banks retreating from the commercial property lending market, the returns available in making relatively safe loans are potentially more attractive than investing in the underlying property,” said the company in a press release.
”Some £24 billion of commercial property loans are reported as due to expire in the next 12-18 months.”
The platform’s focus will be on making loans of: up to £20 million in value; up to 65% of loan to value (LTV); and interest only. The Board of First Property believe that the higher LTV and interest only aspect of loans made via the platform make them close to unique in the current state of debt markets. The capital for making the loans via the platform will be sourced from First Property’s own cash resources and third party investors.
Ben Habib, Chief Executive Officer, commented: “Our move into senior secured commercial property lending via this platform is in response to a clear gap in the market created by higher interest rates and a retreat of traditional lenders, including banks.
“Our loan platform offers borrowers better terms than are typically available and investors in loans made on the platform a high rate of return. For these reasons it is a good time to be entering the market.”
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