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This Lender Is Keen On London Development Finance

Cain Hoy's The Stage in Shoreditch

Development finance is often held up as a barometer of confidence among lenders: If they are willing to lend on development, it is a sign they feel the future can’t be too bad.

If that is the case, Investec Structured Property Finance is clearly one of the more confident lenders in the market. It provided £450M of senior debt in the first half of 2018, a half-year record for the company, including participating in one of the U.K.’s largest ever development loans. And it is on the lookout for more.

“The real estate market continues to polarise, with strong demand for good quality, well-located residential and commercial property, and increasing investor and developer interest in alternative real estate and the attractive returns that can be found,” Investec Co-Head of Loan Origination Simon Brooks said. “Whilst favourable fiscal policy remains in place, the case for debt financing is strong and we will continue to take a prudent and disciplined approach to lending, which has served us so well in the past.”

The £450M lent by Investec in the first half of the year compares to £650M in the whole of 2017.

In April it raised £195M for a Cain International-led consortium which is redeveloping The Stage in Shoreditch, a mixed-use scheme including 400 homes and 186K SF of offices leased to WeWork.

As part of a £390M club loan, Investec committed £97.5M from its own balance sheet and a further £97.5M from Harel Insurance Group.

In May it arranged a £72M facility, totalling a £43M commitment from Investec and £29M of debt from the Israeli Bank HaPaolim, to fund a 140K SF private rented sector and coworking scheme in King’s Cross being built by Teddy Sagi’s LabTech. The loan is the largest so far to a U.K. PRS scheme.

Investec said that on top of development lending it is also looking to expand its investment loan book.