Deutsche AWM boosts senior debt fund to €750m

The fund, which had €500 million in existing commitments, has been boosted with an additional €250 million top-up.

Deutsche Asset & Wealth Management (Deutsche AWM) has increased its real estate senior debt fund to €750 million after raising €250 million in extra capital from investors. It has allocated €400 million to acquire German debt assets and €350 million to opportunities in France, Italy, Spain and the United Kingdom, reported PDI sister title Real Estate Capital.  

Deutsche AWM has already invested about €200 million of its German pool in three deals since launching the fund in January. It has also just completed its first investment outside Germany, taking a £50 million ($77 million; €70.5 million) slice of a £277 million Lloyds Bank and Citigroup loan made against the BBC’s north west headquarters, MediaCityUK.

Deutsche AWM is believed to be close to completing three other deals, two single asset and one portfolio, in Italy and Spain. The European pool is to be half-invested by the end of summer.

“Obviously, we have different pricing between Germany and outside of Germany. It could be anything from 50bps to 150bps,” said Andrea Vanni (pictured), head of European real estate debt investments at Deutsche AWM. “In Germany 70bps to 80bps is where the market is for the better assets and moderate leverage of around 55 to 60 percent. There are even situations where banks will go to 50bps to 60bps. We will probably not follow that.”

Deutsche AWM had initially planned to invest about €500 million in Germany after the fund’s first close in January.

“We certainly see investor appetite shifting from Germany to other European countries to benefit from more attractive risk return opportunities,” said Vanni.

The fund targets debt with loan-to-value ratios up to 60 percent secured against office, retail, residential and logistics assets. Loan maturities range from three to ten years. The fund is expected to be fully invested by the end of the year.

Deutsche AWM’s mezzanine fund, which had an initial close of €250 million last year, is currently undergoing further fundraising. It recently closed a €15 million mezzanine transaction in Germany and is in negotiations on deals in France, Italy and Spain.