BNPP AM's Commercial Real Estate Debt team was created to enable institutional investors to generate attractive risk adjusted returns via investment in loans secured against underlying commercial real estate. Loans of this nature typically have a defensive credit profile generating stable and secure cashflows while offering an illiquidity premium to equivalently rated corporate debt.
The highly structured and covenanted nature of transactions also affords lower default rates and higher recovery rates offering further downside protection to investors.
The Commercial Real Estate Debt team is currently comprised of four individuals with complementary experience across asset management and banking leveraging a 45-strong proprietary origination channel offered by the BNP Paribas Group.
In addition, our relationship with the Real Estate Financing team also allows us to be flexible in the nature of the loans that are brought to BNPP AM clients.
We are able to offer long-dated, fixed rate tranches where the market standard would typically be floating rate, across a number of geographies.
Office campus, tower, CBD, single/multilet
Shopping centre, high street, out-of-town retail, outlet centre
Light industrial, logistics platform
High end, mid scale, budget hotels, hostels
Student housing, nursing homes
Datacentre, parking, leisure
The team’s origination capabilities are two-fold:
Commercial Real Estate Debt is similarly an ideal source of potential CDI assets as the asset class benefits from the following characteristics:
BNP Paribas Group participated in €11.1bn of mortgage financing facilities in 2017 across Europe
|Spread over Libor||2.4%|
|Effective duration (interest rate sensitivity)||0.25|
|Weighted Average Life (WAL)||5.5|
|Expected return (ER)||4.1%|
|Expected risk (standard deviation)||5.8%|
|ER / Stdev||70.8%|
|SCR (solvency capital ratio)||8.0%|
|ER / SCR||51.5%|
BNPP AM, November 2018
No assurance can be given that any forecast, target or opinion will materialise.