Property One launches real estate debt fund
The One Real Estate Debt Fund (OREDF), which allows investors to invest in real estate loans, is scheduled to launch in February. The fund has a target size of CHF 200 million, according to Property One Investors.
According to Property One Investors AG, the One Real Estate Debt Fund (OREDF) is the first fund in Switzerland that allows qualified investors to invest in the private real estate debt asset class.
The initial portfolio consists of current loans with a volume of around CHF 80 million, is diversified, has a high credit quality and is already generating regular cash flows, Property One Investors added. The pipeline for further loan requests is "very well filled," it added. OREDF is looking at a target annual return of 5% net. The minimum subscription amount ranges from CHF250,000 to CHF2.0 million, depending on the share class.
Investors invest in a rolling portfolio of subordinated loans/mortgages that is broadly diversified across different borrowers, types of uses, regional distribution and varying maturities and loan amounts, according to Property One Investors. All loans are reportedly secured by mortgage-backed promissory notes.
Real estate developers based in Switzerland can access transitional and project financing through the fund. Financing is reportedly available only for short- to medium-term subordinated mortgages with a maximum term of 36 months, a minimum loan amount of 1 million and a maximum loan-to-value ratio of 80%. (ah)
