QuadReal Property Group expects that Canadian institutional investors will utilize the company’s new £2.5-billion commercial real estate debt platform in the U.K. and Ireland.

Vancouver-based QuadReal recently expanded its debt-service offering into the region, committing to invest the funds over the next four to five years as lending becomes an increasingly important part of its business. Derek Richter, QuadReal’s vice-president of debt investments, told Connect that the company believes Canadian institutional investors will show strong interest in the new platform.

“We would love to finance existing clients of ours in the U.S. and Canada, and that’s part of the reason why we’re here,” said Richter, who is based in London and overseeing the new platform. “We’ve seen, over the last four or five years, a lot of our biggest clients move to the U.K. as they found opportunities here.”

QuadReal has begun to look at projects on which to partner with investors. Richter expects the platform’s move into the region to attract strong interest.

“Our pipeline continues to grow, and we’re getting good traction on the [investment] opportunities that we like,” he said. “We’ve taken a methodical approach to this, and I’m confident that we will be successful over here.”

Richter said QuadReal has not started funding any specific projects yet, but the company is close to completing its first deal. He declined to provide further details because the company does not like to discuss deals that have not closed yet.

The U.K. and Ireland initiative, focused exclusively on direct lending, builds on the success of QuadReal’s North American debt business, which manages over £7.5 billion in investments and is projected to exceed £8 billion by the end of 2025. The platform’s expansion will draw on the company’s London office, global team, and institutional relationships in the U.S. and Canada.

The platform will target multi-family, student housing, data centres, industrial and self-storage, with an initial focus on construction, transitional and stabilized loans.

“I would say that industrial, student housing, self-storage and residential, those are areas that we have or asset classes that we have a lot of conviction in globally, but also specifically in the U.K. and Europe,” said Richter. “It seems like there’s a housing crisis in most major markets, And, we want to provide liquidity for new-build, lease-up opportunities.

“Those are the asset classes that we’ve got a lot of conviction in and expect to make up the bulk of, if not our entire, portfolio.”

QuadReal expects loans for build-to-rent projects to play a large role in the lending activity across the region.

“We take a very selective approach to vetting markets and making sure that this is the right product for the right location,” he said. “But I suspect that the build-to-rent product will make up a large share of our portfolio.”

Richter was asked whether he thinks investor concerns about the U.S. market could prompt them to invest in the QuadReal platform. He said the company looking to diversify regardless of the U.S. situation.

“At QuadReal, we take a global approach, and we are looking to continue to diversify so that we can take advantage of opportunities regardless of the jurisdiction, and having a debt presence over here allows us to do that,” he said. “On the equity side, we have offices throughout Canada; in the U.S., it’s in New York and California.

“We’ve have an equity office here [in London], as well as in Hong Kong. So, we take a very global approach, and that’s what we’re looking to to also offer on the credit side. It’s really a global diversification so that we can take advantage of different opportunities as different things come up in different markets.”

QuadReal intends to expand further into European Union markets and shift 10% to 20% of its overall debt-portfolio exposure to the region by 2029. Germany, Spain, the Netherlands and Scandinavian countries are on the company’s short list of future European expansion points. Entries into other European markets will follow over time.

But QuadReal does not have major expansion plans for its lending operations in Canada and the U.S.

“Our Canadian and U.S. credit business has been well-established for the last six to seven years,” he said. “They’re very active, and the portfolio continues to grow. This expansion into U.K. and Europe is basically on the foot of that success from both the Canadian lending teams and the U.S. lending teams.

“We’ll always stay active in those markets,” he said. “This is just another avenue of growth that we similar to what drove us to lending in the U.S. and why we still like lending in Canada.”

Since 2021, QuadReal’s North American debt team has completed more than 165 deals concentrated on sectors in which the company believes strongly. As banks have continued to pull back on lending and manage troubled assets on their books, QuadReal’s relatively young North American lending platform has enabled the company to capitalize on liquidity in the market and deploy funds in high-conviction asset classes and markets, said Richter.

QuadReal is a global real estate investment, development and operating company, and ranks among the world’s top 20 real estate investors.

Photo: QuadReal