Insurers and banks can provide property finance packages together, according to Allianz Real Estate, one of Germany’s most active non-bank lenders.
Speaking at Expo Real in Munich, Roland Fuchs, head of European real estate finance at Allianz Real Estate, said the insurer had collaborated and worked in unison with banks.
Fuchs said Allianz had taken positions in large retail financings alongside banks, including a finance package on the Mall of Berlin, and on assets in Munich’s Schwabinger Tor area and the Königsbaupassagen in Stuttgart.
Allianz had, he added, also financed a project in France with German bank Helaba.
Germany and France are the countries where this form of cooperative lending had “developed furthest” in Europe while in the US this joint financing has been around for 30 years, he added.
“But sometimes we also finance projects on our own – we do have the expertise for that,” Fuchs noted.
Loans, he added, were typically split ‘vertically’ between lenders. Another option was for the insurer to sign a senior loan contract, with the bank signing a subordinated loan.
Fuchs said banks could also take on the financing of the construction phase, with an insurer then taking over as the long-term lender.
So-called “new lenders” such as Allianz or other institutions are “not here to replace banks”, Fuchs added – nor take over their loan business. “We offer a complementary source of financing,” he said.
For insurers like Allianz, real estate debt financing was a way to “conservatively” diversify their portfolios, Fuchs added.
“We are only financing 60% to 70%, and a direct investment in contrast is by nature 100%,” he said.
“This way, we can invest in real estate where a direct investment is not possible or where we already have a lot of capital in a market.”