TIAA-CREF to launch European lending platform

The New York-based retirement fund is looking to enter into the senior real estate debt arena in Europe, first by starting in the UK and eventually expanding into continental Europe.

TIAA-CREF is looking to join to the increasingly long line of nontraditional real estate financiers ready to step into Europe.

According to various media reports, the New York-based teachers’ retirement fund said at the Urban Land Institute conference in Paris this week that it is looking to launch a senior lending program in the UK, which it eventually hopes to extend to continental Europe.  

“We see a window to come into the marketplace,” said Thomas Garbutt, head of global real estate at TIAA-CREF, at the conference. “The yields you can get on debt today are attractive.” 

TIAA-CREF already has a team in London that deals with direct real estate investments in Europe. In particular, the fund has been very active in buying retail properties in the UK and Germany. For example, in late 2011, the fund purchased the Perlacher Einkaufsparadies shopping center in Munich from RREEF for roughly €415 million and, in September, it was reported that TIAA-CREF purchased Festival Place Shopping Centre, a 1 million-square-foot shopping mall in Basingstoke, England, from Grosvenor Fund Management for €353.3 million.

Now, Garbutt is looking to add debt expertise to the London team. “It’s a complement to our equity investing,” he added. 

TIAA-CREF joins a growing number of new real estate lending platforms in Europe. Last month, it was revealed that the Government of Singapore Investment Corporation is backing London-based Laxfield Capital in providing up to €1.1 billion of property loans to UK real estate over the next two years. Also in January, ICG-Longbow announced it had raised €120 million from the flotation of its UK senior secured debt investment property vehicle, while Starwood Capital raised nearly €300 million from the IPO of its European debt platform in December.