Monday 20 November 2017

Investment giant ready to lend to our developers

Peter Flanagan

Peter Flanagan

DEVELOPERS unable to get loans from the banks here may be able to turn to one of the biggest financial companies in the world, under plans being drawn up.

BlackRock, the world's biggest investment firm by assets, is preparing an investment fund that will lend directly to property developers who are unable to get access from traditional finance sources in the current climate.

BlackRock has traditionally invested in property by buying the assets themselves. This is believed to be the first time it will lend directly to developers, filling a role that has been vacated by several banks during the financial crisis.

The Europe-wide fund is part of a wider move by asset managers into the sector, believing that it could provide lucrative returns in the future, once property markets recover across the continent.

French firm Axa Real Estate and Germany's Allianz have both outlined plans to lend more than €800m, but BlackRock will be the first US firm to come to the European sector.

A number of US firms have already bought property here, with the world's largest private equity group Blackstone meeting the Government and NAMA last year about taking on distressed property here.

Any investment BlackRock makes in Ireland as a result of this move will only be the latest piece of business carried out by the company here.

The firm hit the headlines last year when it prepared the Government stress tests on the banking sector that were seen by some as overly harsh at the time, but were ultimately proved correct.

Under tough new rules on capital requirements known as Basel III, banks will be forced to retain much more capital against property loans than they have done previously, leading to many lenders looking to employ their funds in sectors that promise greater returns and looser capital controls.

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