BNP Paribas Asset Management (BNPP AM) has exceeded its €500 mln target for its second senior commercial real estate debt fund, BNP Paribas European Real Estate debt fund II, with more than €700 mln committed to date.
This brings BNPP AM’s total assets in senior real estate debt to in excess of €1 bn across two funds. A junior debt strategy is planned for later this year.
BNPP AM said it had seen strong investor interest for its real estate debt offering. Fund II capital has so far been deployed across 19 selective transactions in Continental Europe, in the logistics, office and residential sectors.
Christophe Montcerisier, head of real estate debt at BNPP AM, said: 'We are enjoying strong asset-raising momentum for our second senior fund and are looking to diversify our product offering with the launch of a junior debt fund.
'In the post-pandemic environment of increased volatility, rising interest rates and mounting inflationary pressures, now is an appropriate time to invest in real estate debt.
'It offers both attractive returns, especially relative to equity, and defensive investments backed by properties that provide inflation-linked cash flows, with a significant equity cushion.'
Laurent Gueunier, head of real assets, SME lending & structured finance at BNPP AM, added: 'Based on wide and long-standing credit and real estate expertise within BNP Paribas, the investment team focuses on both the intrinsic quality of real estate and proper loan structuring.
'The large size of the commercial real estate debt market, with around €250 bn of origination each year, offers wide-ranging opportunities to selectively deploy capital. As banks undergo additional constraints, investment opportunities will increase further.'
Fund II follows the launch of BNP Paribas European Real Estate debt fund I at the end of 2017, targeting senior secured loans in commercial real estate across the whole Continental European market, including offices, retail, logistics, hotels, operating assets and non-standard assets.
Fund I closed in April 2021, with €335 mln of capital now fully deployed across 12 assets in continental Europe.