Big-name funds pile into real estate debt as banks retreat

LONDON, May 14 (Reuters) – Some of the world’s largest investors are making deeper inroads into lending to commercial property, as they snap up market share from retreating banks and bet on an end to the sharp drops in real estate prices.

U.S. fund firms PGIM, LaSalle and Nuveen, Canada’s Brookfield (BN.TO), opens new tab and QuadReal, Britain’s M&G (MNG.L), opens new tab, Schroders (SDR.L), opens new tab and Aviva (AV.L), opens new tab, and France’s AXA (AXAF.PA), opens new tab all told Reuters they plan to increase their credit exposure to property.

Most are focusing on lending to logistics, data centres, multi-family rentals and the high-end office market. The office sector more broadly continues to struggle, deterring funds.

“If I look at our strongest bet currently, it’s probably real estate debt,” said Isabelle Scemama, who heads up AXA’s 183 billion euro ($198 billion) alternative investments arm.

LaSalle Investment Management, which manages $89 billion globally, said it was targeting growing its real estate debt investments by 40% to around $7.6 billion over two years, including in distribution, hospitality and student housing.

Source: REUTER