HSAM Europe is intensifying its commitment to secured real estate loans in Western Europe. Through a newly launched European private credit fund, first-lien secured loans with a volume of EUR 10 million to 120 million will be provided. This offering is not exclusively aimed at private equity firms but explicitly also at companies, private entrepreneurs, and project developers.
The fund's strategic orientation encompasses various types of financing. These include whole loans for acquisitions and refinancings with a loan-to-value (LTV) ratio of up to 75 per cent. Financing is also offered for properties in the letting phase, as well as CapEx and development-exit financings. Typical loan maturities vary between one and five years. Total financing costs start at six per cent per annum, depending on the specific characteristics of the property, location, leverage, and use of funds.
Flexible Financing Approaches
A current example of HSAM Europe's activity is the provision of an GBP 11.8 million first-lien secured bridging loan for Banor Capital. This financing enabled the acquisition and refinancing of the DoubleTree by Hilton in Cheltenham, UK, which has 148 rooms. The twelve-month loan served to refinance existing construction loans and offered the borrower a stabilisation period after the completion of refurbishment, before traditional bank refinancing took place.
This transaction illustrates the type of financing HSAM Europe targets: first-lien secured loans for institutional-quality properties where individual requirements for timeline, business plan, or capital structure necessitate a bespoke solution that goes beyond the offerings of traditional banks. By avoiding back-leverage, HSAM Europe can ensure high agility and flexibility, making decision-making processes efficient and straightforward.
Extensive Expertise and Market Understanding
HSAM Europe has over ten years of investment experience in European real estate debt. Its track record includes both first-lien secured loans and more complex, opportunistic financings. This expertise enables the team to conduct precise analysis of properties, sponsors, and business plans across the entire capital structure. The financings are tailored to specific transactions, rather than adhering to a rigid credit grid.
Max Leeb, Deputy CIO at HSAM Europe, points out that real estate lending has long been a core area of the European business. He explains that the company's credit expertise, even though it is known for complex and opportunistic financings, is equally applicable to first-lien secured loans. Borrowers seek transaction certainty, flexibility, and a financing partner who understands the respective property and the underlying business plan. HSAM Europe invests in a wide range of real estate segments, including residential, student housing, hotel properties, logistics, industrial, self-storage, healthcare properties, and office properties. Its geographical focus extends across the UK, Spain, Germany, France, Scandinavia, Ireland, the Benelux countries, Austria, Italy, Portugal, and Switzerland.
