DWS closes three real estate debt transactions across the capital stack

DWS has successfully closed three major European real estate debt transactions, strategically deploying capital across various asset classes. With access to different pools of capital, DWS has evolved with changing investor preferences, demonstrating an adaptability and resilience across multiple layers of the capital stack.

DWS, in conjunction with two other lenders, provided a refinancing of a £227m loan whole loan in the UK on more traditional senior loan terms after the Sponsor successfully developed the first phase of a co-living scheme, achieving strong occupancy in the first few months following practical completion. A second-phase build-to-rent component is due to complete in July 2025. Given the supply / demand constraints in the city, strong demand is expected from the local market once completed.

DWS provided a £23m / 70% mezzanine loan secured against a best-in-class, fully-let office in Manchester. The financing was used to repay the existing development debt, fund fit-out works, and to cover interest shortfalls during the rent-free periods. The asset is a high-quality space which set the rental benchmark in the city, achieving 100% occupancy prior to practical completion.

Finally, the team closed a €40m whole loan refinancing for a recently re-developed office block in Paris. The asset has been meticulously transformed into a modern office building that incorporates sustainable features such as geothermal energy systems and green roofs. Fully leased to a reputable tenant under a long-term lease, the property is situated in a vibrant neighborhood known for its mixed-use environment, including residential, retail, and office spaces.

These three opportunities were all delivered to high ESG specifications and in line with investor appetite. DWS continues to focus on European real estate higher yield debt opportunities, providing whole loans with pricing starting in the region of 350-450 bps over Euribor.

Alexander Oswatitsch, Head of Real Estate Debt at DWS, said: “These three transactions show our ability to achieve positive outcomes in difficult macro-economic conditions. Leveraging our in-house research capabilities, we have taken a disciplined approach to underwriting risk in each of these scenarios for the benefit of our clients”.