European Debt
Overview
Investment Approach
The Fiera European real estate debt strategy seeks to capitalise on the dislocation within the European commercial real estate debt market by providing bilaterally originated, senior secured real estate debt to institutional grade sponsors.
The aim of the strategy is to provide investors with attractive semi-annual dividends of >4% p.a. with capital preservation as the core overarching focus. Each senior debt investment will benefit from first ranking security and tailored covenant packages ensuring full control throughout the loan life with multiple pathways to exit.
Target returns are not guaranteed. Inherent in any investment is the potential for loss.
Key Principles
The strategy is well positioned to capitalise on the dislocation in the market:
Supply
Banks are retrenching due to regulatory factors (amongst other reasons), creating a long term gap for private debt lenders.
Demand
A €1.6 trillion commercial real estate debt market combined with funding gaps at the point of refinance due to heightened rates provides significant and sustained demand.
Macro-Economic Fundamentals
Higher long term base rates versus those prevalent in the previous decade have led to increased levels of return being achievable for private debt lenders.
Investment Characteristics
Low Volatility
income stream
Downside Protection
at an avg. of ~60% LTV
Real Asset Security
share pledges and bespoke covenants
Diversification
to real estate equity with low correlation
ESG Alignment:
- Article 8 – The strategy is classified under the Sustainable Finance Disclosure Regulation and will promote environmental and social characteristics through its approach to lending.
- Proprietary Lending Framework – The strategy will use Fiera Real Estate’s Sustainable Lending Framework to consider the ESG position for all potential borrowers/sponsors, as well as the ESG characteristics of each project. In order to be eligible for a loan, each project needs to score above a certain threshold. If a project doesn’t meet this requirement, unless there is an exceptional circumstance, the loan will either not be proceeded with or the strategy will work with the borrower/sponsor to improve the score to the necessary level.
- Net Zero Carbon – The strategy is committed to being Net Zero Carbon (NZC) by 2035 in line with Fiera Real Estate’s broader NZC commitment.
Fiera Real Estate supports
the Sustainable Development Goals
In 2015, all UN Member States adopted the 2030 Agenda for Sustainable Development. Underlying ‘Agenda 30’ are 17 Sustainable Development Goals (SDGs), which address the urgent call to end extreme poverty, fight inequality and injustice and to protect our planet.
The targets we have set for ourselves in order to meet our ESG commitments have been aligned with a number of these SDGs, but we have placed particular focus on the below:
Recent Pan-European Real Estate Debt Deals
Valencia
PBSA Development
Alicante
PBSA Development
Southampton
Logistics Development
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