Octopus Real Estate agrees £450m funding partnership
Octopus Real Estate, part of Octopus Group, has agreed a funding partnership with affiliates of Bayview Asset Management, to provide a two to five-year senior investment debt to the UK commercial real estate market worth £450m.
Having identified an undersupply of loans in the smaller commercial investment debt market, the funding will target loan opportunities up to £25m.
Nick Westoby, commercial fund manager at Octopus Real Estate, said: “Today’s announcement represents another exciting milestone in Octopus’ longstanding commitment to the UK commercial real estate debt market.
“The structural undersupply within the sub-£25m part of the market provides significant opportunity and plays to our strengths.
“The granularity and liquidity of smaller loan sizes have been tested over the pandemic, showing robust performance.
“The opportunity to partner with Bayview was compelling, given their deep understanding of commercial real estate and wider corporate values.”
Benjamin Davis, chief executive of Octopus Real Estate, added: “Our partnership with Bayview further demonstrates the excellent range of opportunities available for local and international institutional investors to participate in the UK real estate market.
“It follows a successful period for Octopus, having recently established the £175m Greener Homes Alliance with Homes England and announced a record £462m fundraise for our UK commercial bridging strategy.
“With specialist expertise across the residential, commercial and development sectors, Octopus is uniquely positioned to deliver upon the demand from institutional investors for high-quality, diverse real estate assets that meet a range of investment criteria.”
Zhu Gong, European structured credit at Bayview Asset Management, said: “At Bayview, we continue to search for and grow strategic partnerships that offer innovative funding solutions in often under-served markets.
“We welcome this opportunity to work with Octopus, whose expertise will help us gain exposure to high-quality UK small-balance CRE loans.”