Hermes Investment Management has granted a 拢42 mln (鈧�54 mln) five-year loan to private equity firm HIG Capital for the purchase of two UK shopping centres.
Hermes, acting on behalf of its Hermes Real Estate Senior Debt Fund, is financing the acquisition of the Kirkgate Centre in Bradford and Newbury鈥檚 Kennet Shopping Centre.
This deal brings the total amount the fund has invested in the UK senior debt market to 拢300 mln across nine loans. The Hermes Real Estate Senior Debt Fund aims to generate net returns exceeding 3 month LIBOR plus 2% margin per annum by investing in loans with equivalent risk to corporate bonds rated A- or BBB.
'Fundamentals in the UK real estate senior debt market are strong, with occupier demand remaining at healthy levels despite a moderate slowdown in investment activity in the sector,' said Vincent Nobel, head of Real Estate Debt, Hermes Investment Management. We still see a good supply of low risk deals offering our investors an income return that is compelling on a risk-adjusted basis. In 2015 we saw more than 146 loan opportunities worth in excess of 拢10 bn, and we expect to make further deployments this year.'
