Insurance group Allianz has made its first real estate loan in Italy, by co-financing a retail and office development in Piazza del Duomo in central Milan.

The asset – a seven-storey building with 9,000sqm of space – is owned by clients of CBRE Global Investors.

The financing was arranged and co-financed by Natixis, Milan, while Allianz Real Estate implemented the transaction within Allianz.

Roland Fuchs, European head of real estate finance at Allianz Real Estate, said: “This opportunity supports our pan-European expansion plans for debt.”

Within the past 12 months, Allianz Real Estate has diversified geographically by providing debt loans in Spain, the Netherlands and the UK.

Its European commercial real estate business reached €5bn in the first quarter of 2017.

“Through Duomo we are entering Italy, the next step in our strategy,” Fuchs said.

Allianz Italy provided a fixed-rate bullet structure deal which is guaranteed by a mortgage with a maturity of seven years. Bullet structured lending is designed to return principal to investors in one payment.

The deal confirms the attractiveness of the Italian market, said Klaus-Peter Roehler, chief executive of Allianz Italy.

Allianz has been active in Italy’s infrastructure debt market, investing last year in the first project bond issued to refinance the Mestre motorway bypass.

This year, together with Allianz Capital Partners and international partners, it acquired a minority stake in Autostrade per l’Italia from the Atlantia Group.

Allianz Real Estate said its European financing strategy was based on the same criteria it had for direct or indirect property acquisitions, focusing on core and core-plus retail, office and logistics assets.

Credit periods are between seven and 20 years with a loan-to-value ratio of 50–70%, it said, with preferred financing volumes of between €100m and €300m.