Blackstone and finance provider to lend £2bn across UK and European living sector

It is intended to provide financing solutions for developers in the living sector across Europe, where there has been a rising demand for private credit. 

Banks have continued to reduce real estate debt lending, while there is approximately €1tn (£873bn) of commercial real estate debt outstanding and €310bn (£271bn) in annual origination.

Lending opportunities in the living sector have been driven by a systemic undersupply of housing across major cities driven by population growth, shrinking household sizes and persistent delivery shortfalls.

Pluto Finance, which is book-funded by institutional investors such as pension funds, local government pension schemes and insurers, has lent more than £3bn since its inception in 2011, facilitating the development of more than 12,000 new homes.

Justin Faiz, chief executive of Pluto Finance, said: “The combination of Pluto’s specialist expertise [and] BREDS’ scale and resources positions us strongly to bring highly flexible, institutional-grade private credit solutions to real estate owners and developers.”

David Gorleku, head of BREDS Europe at Blackstone, said: “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.”

As well as lending private credit to developers, Blackstone owns and operates homes across the living and affordable housing sectors. In August, it submitted plans to deliver 600 student beds and 71 social rent homes in south London.

Earlier this year, it completed the UK’s largest ever sale of fully operational single-family housing – selling more than 500 single-family homes for £225m to developer Placefirst.