Octopus Property launches next institutional RE debt fund

Octopus Property, the specialist UK property lender and part of Octopus Group, today announces a first close of £115 million for its second commercial property debt fund (‘the Fund’), an institutional debt strategy focused on the UK commercial property market. Octopus Property is one of the UK’s leading non-bank lenders, providing bespoke financing facilities secured on commercial, development and residential property. Since 2009, it has lent in excess of £2.6 billion across c. 2,600 loans. The launch of its second commercial property debt fund follows the successful deployment of CREDF I, a £130 million fund launched three years ago, and CREDF-S, a £35 million fund raised from existing investors in 2016 due to sustained institutional demand. The two funds have completed more than £420 million of lending, secured against commercial real estate across mainland UK. CREDF I has returned a gross IRR of 12.6% to June 2017. The Fund will provide sufficient funding to complete loans with a combined value in excess of £500 million over the next three years. Ludo Mackenzie, Head of Commercial Property at Octopus Property and manager of the Commercial Real Estate Debt Funds, said: “Repeat commitments from CREDF I investors, together with new investment, are testament to the continued strength and growth of the business as well as the successful track record of CREDF l and CREDF-S. There remains a real need for commercial property finance in the UK market, and we have built a reputation and track record of delivering bespoke solutions, quickly and efficiently. “From a borrower’s perspective, we provide loans that are more versatile than traditional bank finance and cheaper than private equity. From an investor’s perspective, CREDF I has been able to deliver returns that are comparable to equity funds.”   Simba Capital is acting as Placement Agent and Macfarlanes is providing legal support for the Fund.