Canadian lender enters Irish commercial property market

Canadian property investment firm Timbercreek Asset Management has become the latest overseas specialist lender to emerge on the Irish commercial property market, with plans to lend up to €200 million for investment projects over the next two years.

The Toronto-based group, which has CAN$6 billion (€4 billion) of assets under management, has hired Paul Roddy, a former executive with Hudson Advisors, which provides asset management services to US private equity firm Lone Star, to lead the Irish business. Mr Roddy also previously worked for Irish Bank Resolution Corporation.

Timbercreek is targeting loans of between €1 million and €50 million to sectors including office, retail, rental apartments and hotels.

Mr Roddy said the company is already involved in six to seven potential deals, and plans to start lending within the next 90-120 days.

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Timbercreek is among a number of non-bank financiers to enter the Irish market as domestic lenders, battered by the financial crisis, restrict their finance to the lowest risk projects. Others include US private equity firm KKR, investment firm Quadrant Real Estate Advisors and a joint venture between Cardinal Capital Group in Dublin and WL Ross in New York.

While other firms offer higher-risk mezzanine financing for projects, investments and developments, Timbercreek is targeting the investment market with commercial mortgages of up to 75 per cent of the value of a property.

Bradley Trotter, managing director of US and European debt at Timbercreek, told The Irish Times that the company is "agnostic" about what segments of the market it plans to lend to. However, he highlighted "there is a shortage of student housing" in Ireland, and also a potential to lend to property investors seeking to upgrade office space in Dublin and elsewhere in Ireland.

He said Timbercreek believes Brexit will be "a plus" for the Irish office market as London-based companies seek to secure rights to passport financial services after the UK leaves the European Union.

“Ireland is a growing economy, with good economic and commercial real-estate fundamentals,” Mr Trotter said. “The strong economic growth provides a great tailwind around real estate.”

Many of the loans – which would currently typically carry a 6.5 per cent interest rate in Dublin – are likely to be refinanced in time with the main banks, Mr Trotter said.

Timbercreek currently has “a little under €100 million” of real-estate loans in issuance in the UK, and “backed off a bit” from that market as Brexit developed, he said.