Whitewood raising permanent capital for real estate lending

The LSE-listed vehicle will invest in European commercial real estate, primarily in the Benelux countries.

 Real estate investor, Whitewood REFF, is launching a £125 million ($188 million; €175 million) initial public offering for a real estate debt investment vehicle. The London Stock Exchange-listed vehicle will invest the equity raised in loans secured against Benelux office units.

Whitewood, an affiliate of private real estate investor the Whitewood Group, will be advised by Whitewood Capital REIM. The firm is offering 125 million ordinary shares at £1 each, according to an announcement.

The vehicle is targeting an annualised net dividend yield of 5.75 percent and a total return over the longer-term of between 10 and 15 percent, according to documents released by Whitewood.

The debt investments will be made into profit sharing loans giving the lender both a cash coupon and any equity upside in the value of the asset at the end of the loan term. Loan-to-value will be up to the ‘brick value’ or replacement cost of the building and the loan tenors will be between two- and five-years.

Whitewood is targeting the Netherlands and Belgium real estate loans as refinancing and new money financing continue to be difficult to access, according to the documents. The firm also cited the large anticipated sales of non-performing real estate loans.

The listing is expected to complete by around 19 March.