Blackstone and Pluto Finance partner on European real estate debt

Blackstone Real Estate Debt Strategies (BREDS) and Pluto Finance have formed a £2 bn (€2.3 bn) partnership to offer real estate financing across the UK and continental Europe. 

Blackstone

This collaboration will provide loans of £25-100 mln (€28-114 mln) for both development and investment projects, primarily focusing on logistics and various residential sectors like rental housing, student accommodation, and co-living.
This new financing strategy is being introduced at a time when there's a growing need for private credit in Europe. The European commercial real estate market, with about €1 tn in outstanding debt and €310 bn in new loans each year, is increasingly looking to non-bank lenders because traditional banks are pulling back from real estate financing. 
Furthermore, a persistent housing shortage in major cities, caused by population growth, smaller households, and a lack of new construction, presents attractive lending prospects in residential real estate.
Justin Faiz, CEO of Pluto Finance, commented: “We are very excited to partner with BREDS as we expand our real estate lending platform across the UK and into continental Europe. The combination of Pluto’s specialist expertise paired with BREDS’ scale and resources, positions us strongly to bring highly flexible, institutional-grade private credit solutions to real estate owners and developers.” 
Ciaran Singh, managing director Europe, at Pluto Finance, said: "We are seeing significant demand from borrowers across Europe for private credit funding to support investment in mid-market property assets and developments across multiple sectors. This hugely exciting partnership with BREDS means that we will be able harness Pluto's origination, structuring and management expertise to deliver debt solutions to meet this growing demand. Our in-country teams have deep knowledge of our core continental European target markets, and we look forward to building on our strong track record in the UK, where Pluto has lent nearly £3.4 bn (€3.9 bn) across more than 300 transactions."  
David Gorleku, head of BREDS Europe, Blackstone, added: “Pluto Finance has an established and successful track record in small-to-medium balance real estate lending, and we are excited to partner with them to bring institutional capital to an otherwise underserved market. As a platform, we continue to broaden our investment approach, and we view this as an attractive opportunity to expand our lending capabilities into the mid-market segment where we see compelling relative value.”