Iberia: A Strategic Debt Opportunity

In its European real estate debt strategy, why has Fiera Real Estate decided to focus on Spain? What variables are being identified in this market?

We like the depth of opportunity in Spain, where we can leverage our local presence and experience there to drive deal flow and partner with the best sponsors. Spain is a nascent and fragmented market with a high volume of stock that is either unfunded or needs refinancing, and in sectors which benefit from the strongest fundamentals and structural tailwinds. That’s a compelling proposition for flexible and well-capitalised alternative lenders such as Fiera.

We are sector agnostic, but we particularly like the residential-rental market, where supply-demand imbalances and demographic dynamics are overwhelmingly favourable. This part of the market is full of high-quality sponsors too, and that’s really important for us as it means we’re lending against best-in-class real estate and healthy balance sheets.

The extent of bank retrenchment is another reason to focus our efforts there. Reduced exposure to real estate holdings – in response to market uncertainty and regulatory change – is not unique to Spain, but its major banks are acutely aware of how they were affected by the GFC, so are taking an even more conservative approach than some of their European counterparts. We are stepping in to provide some of the capital solutions required to deliver Spain’s built environment.