octopus real estate

Octopus secures £450m funding to lend in UK commercial property market

Octopus Real Estate has agreed a £450m funding partnership with Bayview Asset Management to provide two- to five-year senior investment debt to the UK commercial real estate market.

The funding, which will complement the lender’s existing range of products, will target loan opportunities up to £25m to support the smaller commercial investment debt sector.

PwC acted as Octopus Real Estate’s lead adviser for the funding agreement. 

Nick Westoby, commercial fund manager at Octopus Real Estate, said: “Today’s announcement represents another exciting milestone in our long-standing commitment to the UK commercial real estate debt sector. 

“The structural undersupply within the sub-£25m part of the market provides significant opportunity and plays to our strengths. 

“The granularity and liquidity of smaller loan sizes have been tested over the pandemic, showing robust performance. 

“The opportunity to partner with Bayview was compelling, given its deep understanding of commercial real estate and wider corporate values.”

Benjamin Davis, CEO at Octopus Real Estate (pictured above), added: “Our partnership with Bayview further demonstrates the excellent range of opportunities available for local and international institutional investors to participate in the UK real estate market. 

“It follows a successful period for us, having recently established the £175m Greener Homes Alliance with Homes England and announced a record £462m fundraise for our UK commercial bridging strategy. 

“With specialist expertise across the residential, commercial and development sectors, Octopus Real Estate is uniquely positioned to deliver upon the demand from institutional investors for high-quality, diverse real estate assets that meet a range of investment criteria.”

Zhu Gong, head of European ABS at Bayview Asset Management, commented: “At Bayview, we continue to search for and grow strategic partnerships that offer innovative funding solutions in often under-served markets. 

“We welcome this opportunity to work with Octopus Real Estate, whose expertise will help us gain exposure to high-quality UK small-balance commercial real estate loans.” 

Pierre Lussato, head of Bayview International at Bayview Asset Management, stated: “We are very excited to partner with Octopus Real Estate and help fill a financing gap in the UK real estate market. 

“We believe Octopus Real Estate to be uniquely positioned to interact with asset owners through its entrepreneurial, yet disciplined mindset. 

“This will represent a further foray into non-bank lending for Bayview in Europe.”

Leave a comment