REAL estate asset manager Axa Real Estate has raised €350m (£300m) in the first close of its commercial property debt fund to take advantage of the shortage of bank loans to the sector.
The firm is targeting a final level of €1bn for the fund, to add to €1.15bn in existing commitments it has gained from clients to invest in debt, and a further €1bn it has already invested in the sector, AXA said in a statement.
The Commercial Real Estate Senior 1 fund, which will provide senior loans directly or as part of bank syndicates, has raised €350m from European insurance companies and AXA group companies, it said.
“I am very excited by the fact that this increases our total underwriting capacity to some €1.5bn at a time when most banks have a very limited capacity to act,” said Isabelle Scemama, head of debt at AXA REIM SGP, an AXA Real Estate unit.
AXA has previously said the new debt fund was designed to take advantage of a shortage in real estate financing in Europe.
An estimated $245bn of global commercial property debts may face refinancing problems between 2011-2013, a DTZ report has said, and industry experts expect insurers like AXA to help fill the void.
AXA Real Estate said it expected the fund to offer returns “significantly above those of more traditional credit products, but with an attractive risk premium”.