Insurer Pricoa closes first UK loan

Pricoa, the subsidiary of Prudential of America, has made its first real estate loan in Europe.

Pricoa Mortgage Capital announced today it has closed a £70m, 11-year term loan for O&H Group secured on four multi-let offices in central London and a supermarket in Bath.

The company is the latest insurance group to start writing commercial mortgages, taking advantage of banks’ retreat from property lending.

Aviva, MetLife and M&G Investments have all been active lenders this year, and Legal & General Investment Management made its first loan last month.

According to Savills, insurers were 15% of the UK lending market in 2011 and head of valuation William Newsom predicted this month that the market-share of non-traditional lenders would rise over the next few years to one third.

Pricoa’s new European origination business is headed by Drew Abernethy, based in London. He reports to Thor Orndahl, a managing director who oversees Pricoa’s non-US mortgage platform. Orndahl said: “The diversification we can achieve by investing a portion of our portfolio outside the US, whether in Europe, Japan or Mexico, is very valuable.

“The current market dislocation provides the opening we have been looking for and our plan is to be active in Europe for many years to come”.

Pricoa is targeting £325m of long-term, fixed-rate senior debt loans in Europe this year and is looking at Paris and major German cities as well as the UK and at offices, logistics, multifamily and retail property.

Jane Roberts, editor