New fund manager LeadCrest says it is innovating in Europe by launching as a pure play sale leaseback firm to tap into the continent’s €3.5 tln real estate market and unlock high yields for investors.
LeadCrest, which has been established by Georges Asmar, the former managing director of Colony Capital, promises to break new ground by being the first fund management business dedicated to European sale leaseback.
The company believes the approach in mainland Europe has great potential. In the US, sale leaseback transactions total more than $50 bn (€44 bn) a year.
LeadCrest is aiming to build up a diverse portfolio spanning asset classes including retail, industrial and office and special-purpose, in locations across western and northern Europe by targeting transactions worth between €10-50 mln, involving properties with leases exceeding 10 years.
Sale leaseback should appeal to businesses with high-quality capital assets, which are keen to unlock capital tied up in bricks and mortar. For investors, the appeal lies in a reliable income stream from high-yielding assets.
Commenting on LeadCrest’s launch, Asmar said, ‘Sale leaseback as an investment strategy is largely untapped in Europe outside of the UK. In the US it is an established and growing asset class, with over $50bn of transactions taking place each year and as many as 42 institutional funds focusing purely on sale leaseback.'
He added, ‘We see very positive opportunities across Europe, where there is clear demand from strong companies to secure long-term financing, but where sale leaseback activity to date has been very limited. Even in markets such as the UK where sale leaseback is more common, we believe there remains significant pull and push factors that point to further growth in sale leaseback transactions.
‘Our objective is to build a diversified portfolio of high-yielding real estate assets, occupied by credit tenants on long-term, triple net leases. In time we hope to be the preferred source of real estate capital for all companies in Europe.’
LeadCrest’s senior leadership team will also include Pascal Leclerc, who has been appointed as LeadCrest’s chief operating officer and managing director. Pascal brings over 25 years of experience in fund management, structuring and administration, including four years as managing director at Colony Capital Luxembourg Sàrl.
LeadCrest’s advisory panel of real estate experts will include Stuart Koenig, who served as senior partner and chief operating officer at Ares’ $10 bn Real Estate Division, and Reggie Winssinger, the founder and chairman of National Portfolio Inc and an expert in Net Lease transactions through his 23-year tenure as board member of W. P. Carey, Inc.
Former Wharton Business School Professor and academic leader, Olivier Chatain, of international business school HEC Paris, will also serve on LeadCrest’s advisory board, advising on corporate strategy.