GE Real estate acquires £2 billion in commercial loans

The US investor has taken on more than 100 loans from a British building society.

The European division of GE Real Estate has bought a £2 billion (€2.7 billion; $4.1 billion) package of more than 100 loans from Bradford and Bingley building society, it said today.

Announcing the deal, UK head Michael Rowan said he was confident the portfolio could add significant value to the business. He also called the transaction “large and complex” and described it as being an “opportunity regardless of market conditions.”

The performing loan package has been purchased from a group of more than 100 borrowers, many of which “are well known names in the property industry,” according to GE.

It takes the company’s commercial investments in Europe to over $20 billion.

The firm’s deal to buy performing loans comes at a time when property returns in the UK are falling, as evidenced by the third quarter data released by the Investment Property Databank (IPD) recently.

The IPD UK quarterly index showed a total return of -1.1 percent, quarter-on-quarter. Retail property was the weakest performing sector, down 1.8 percent.

Capital growth of properties was also in negative territory. Retail property capital growth was -2.9 percent, while for offices it was –0.2 percent. This means that gains made in the first two quarters of the year have been wiped out, said IPD research director Malcolm Fordsham.