Korean Teachers' Credit Union joins TIAA in UK real estate debt fund

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TH Real Estate has raised £300m (€335m) for a UK real estate debt fund, securing commitments from the Korean Teachers’ Credit Union (KTCU) and its parent company TIAA.

The announcement comes six months after IPE Real Estate reported that Korean pension fund KTCU and US financial services group TIAA had agreed to invest $1bn (€846m) together in US real estate debt.

The fund, called the Global Real Estate Debt Partners–Fund I (UK), is open to other third-party investors.

it will invest in senior loans with moderate loan-to-value ratios secured on London office assets with a view to generating annual returns ”in the mid-5% range”.

Christian Janssen, head of debt at TH Real Estate, said UK commercial real estate debt is “appealing to investors because it offers income-focused returns from a protected position in the capital structure”.

He said: “London offices in particular are underpinned by global structural trends and well positioned to deliver long-term value growth.”

Last year, TH Real Estate was given a mandate to invest in UK real estate debt by two Korean insurers, and the year before that it launched its first UK debt fund.

Earlier this year, IPE Real Estate reported on how Korean pension funds and insurers were increasingly targeting real estate debt.

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