LENDINVEST has partnered with Merseyside Pension Fund to finance a £12m loan for a new hotel and residential project in London’s Docklands.
The online mortgage lender, which is part of the Peer-to-Peer Finance Association, has originated and underwritten one of its largest loans to date to co-fund the development of a 320 bedroom budget hotel and 199 residential units in Canary Wharf.
It will act as security trustee and loan servicer, while the public sector pension fund managed the syndication of the loan – a joint investment model that LendInvest intends to replicate going forward.
“We are delighted to be working with major public sector institutions like MPF which is something that we have built LendInvest to do successfully,” said LendInvest Capital’s managing director Rod Lockhart.
“Returns from short-term property debt are increasingly attractive to investors in this low interest rate environment.
“We look forward to making co-investments with MPF and other UK pension funds as a regular component of our funding mix.”
The loan was made to an established property developer who has applied for planning consent for the project, with a decision expected during 2017.
The move marks the beginning of a new strategy to provide larger loans to established borrowers investing in and developing property around the UK, the platform said.
LendInvest has channelled over £850m of short-term project finance to UK landlords, investors and developers since it launched in 2008. It also manages £385m on behalf of private clients, wealth managers, family offices and institutions.
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Merseyside Pension Fund has also focussed on investing in property debt over the last 18 months, as it sees it as a source of strong returns.
“At the current time we believe that investing into the property debt space provides attractive relative returns compared to direct equity property investments,” said Chris Shorrock from CBRE Capital Advisors, which advised the pension fund.
“Having an allocation for debt funding in the property portfolio should assist us in outperforming the fund’s real estate benchmark.
“We are pleased to have undertaken our first debt syndication with LendInvest and it demonstrates that alternative lenders and institutional investors can team up to achieve attractive returns for their investors.”