The Real Estate Debt Fund I, the first of its kind by Italy’s DeA Capital Real Estate SGR, is aimed at the growing European property lending sphere. The latest initiative will offer real estate collateral-backed loans to property developers and asset owners, as non-bank lenders become a major source of financing in Europe.
DeA Capital uses more than 50 real estate funds to administer about €12.2 billion. It is among the largest alternative investment funds in Italy. The initiative extends its platform from equity-based strategies to credit to meet increasing demand for flexible property finance. This diversifies its platform strategy.
A Timely Step into Real Estate Debt
The property finance market in Europe is changing structurally. Since early 2023, banks have tightened lending due to higher rates and regulatory constraints. This has left a financing gap exceeding €100 billion. Property developers and landlords with loans reaching maturity are increasingly looking to refinance through private credit funds.
A 2025 CBRE survey found that almost 80 percent of lending organisations in Europe plan to ramp up their origination activity, primarily to refinance loans. Debt funds such as DeA Capital are stepping in to provide solutions where banks remain selective.
Pricing patterns are beginning to return to their previous states. Senior loans for prime European properties currently carry margins ranging from 1.2 to 2.4 percent above five-year euro swaps, equivalent to total borrowing costs of around 3.5 to 4.7 percent. Transitional and development loans are priced higher, between 5 and 7 percent, depending on risk and structure. These returns give institutional investors a guaranteed euro income with less volatility than an equity investment.
What the Fund Will Target
DeA Capital will lend to developers and owners of properties, most likely through senior and whole loans across commercial, residential, logistics, and hospitality assets. This category includes both income-generating properties and development projects.
Through Italy’s AIF framework, the investment vehicle will target institutional investors seeking secured real estate opportunities. While the company has not revealed the target size, market observers anticipate an initial raise in the hundreds of millions of euros.
Given DeA Capital’s presence in Italy, Spain, France, and Poland, the fund is expected to invest beyond Italian loan origination and tap into recovering property sectors across Europe.
Expert Views and Market Outlook
Market experts say DeA’s launch comes at a useful time. According to Giovanni Manca, a Milan-based real estate adviser, the lending environment in Italy is shifting from a bank-led to a hybrid model, with private debt funds now playing an important role. DeA’s entry brings together local market knowledge with institutional discipline.
According to DWS, pricing is adjusting in the European credit market, which is stabilising. In addition, loan-to-value ratios for prime assets have once again risen to around 55%. Analysts believe this opens a sustainable window for credit funds to earn strong risk-adjusted returns with conservative leverage.
Strategic Evolution for DeA Capital
DeA Capital has launched the Real Estate Debt Fund I in Italy for the first time. Previously focused on real estate equity, the firm has consistently and successfully diversified into infrastructure and private equity. It is now adding a credit pillar to its roadmap. This evolution enables the firm to offer investors full capital-stack access — from senior debt to equity — across European property assets.
DeA Capital has also launched the DeA Urban Real Estate Fund II, which converts underused offices in Rome and Milan into flats and other spaces. This new debt platform will complement those efforts by financing similar redevelopment projects that are sustainable and energy-efficient.
Looking Ahead
Not much is yet known about fundraising targets or investor composition, but sources indicate the first closing will likely take place in early 2026. Future iterations of the fund could also provide ESG-linked lending in favour of energy-efficient buildings and retrofitting projects aligned with the goals of the EU Renovation Wave.
Developers can turn to DeA Capital’s new debt fund as banks decrease their lending capacity. In today’s uncertain rate environment, investors have an excellent opportunity to access stable, asset-backed yields ranging from 3.5% to 7%.
The Bottom Line
DeA Capital’s latest foray into real estate debt signifies a broader shift in European property financing. As traditional banking becomes scarcer, DeA offers structured, competitive, and secured alternative funding solutions. The establishment of this fund strengthens DeA’s position and underlines how private credit will play a key role in Europe’s next real estate cycle.
