Prudential Mortgage Capital Company has closed its first commercial real estate loan in the UK. Security for the £69 million ($108 million) in funding is being provided by a portfolio of several properties, including four office properties located in central London and a retail grocery property in Bath. The 11-year mortgage is the first secured commercial loan the company has extended since opening its London advisory office in January of this year.
The portfolio’s sponsor is a family-run business called O&H Group. Established in 1982, the business owns a number of properties and developmental projects in central London and other locations throughout the United Kingdom. It is headquartered in Mayfair and employs over 50 people.
Prudential has set a target of £321 million ($500 million) to be used for funding long-term, fixed-rate loans in Europe in 2012. The company has the capacity to provide a much higher amount of funding over time, and Prudential is planning to provide funding for commercial transactions on an individual basis.
All loan funds will be advanced by the company in local currency and secured by income-producing commercial properties. The company’s first forays into commercial lending in the UK will be focused on retail, office, logistics, and multifamily properties in and around major urban centres such as London and Paris. The company is also interested in working with commercial property owners in major urban areas in Germany.
Prudential is committed to investing a portion of the company’s portfolio outside of the United States. With a large number of commercial mortgages coming due for renewal in the near future, the time is right for the company to offer this service to clients in the UK and Europe.
