Allianz Real Estate has extended its €5 bn European debt strategy to the Italian market by co-financing CBRE Global Investor's acquisition of an office and retail development in Milan.
Munich-based Allianz Real Estate announced its participation alongside Natixis in the €135 mln, 7-year fixed-rate lending deal on behalf of Allianz Italy, on 19 July.
The financing supports CBRE GI's acquisition of the development at Piazza Duomo 25 in downtown Milan. The seven-story building will provide 9,000 m2 of leasable space. The retail space has been let on a long-term lease, while the offices will undergo repositioning.
'This opportunity supports our pan-European expansion plans for debt,' said Roland Fuchs, European head of real estate finance at Allianz Real Estate. 'The past year has seen us diversify geographically through recent loans into Spain, the Netherlands and the UK and reach €5 bn in the first quarter of 2017. Through Duomo we are entering Italy, the next step in our strategy.'
While Allianz did not go into detail about the financial aspects, PropertyEU and its weekly publication, EuroProperty, revealed in mid-June that Natixis was providing a €135 mln facility for the Milan acquisition. The Natixis financing was organised by CBRE's European debt broking and advisory team, which has in recent months won mandates from three fund managers, including CBRE GI, for its services.
The CBRE GI lending advisory mandate was awarded earlier this year after the investment adviser went out to four debt advisory firms requesting proposals. Since then, CBRE debt & structured finance has arranged three loans for CBRE GI’s flagship open-ended pan-European fund. The Milan financing is the largest of the three. Click here for more on the lending mandates.
Allianz debt strategy
Allianz Real Estate has some €50 bn of assets under management spread globally through direct and indirect real estate equity investments and debt. The real estate arm of German insurer Allianz sees property financing is an 'important pillar' in its overall business.
The group's commercial real estate lending portfolio is currently focused on Europe and the US. It totals about €15 bn worldwide. In the USA, Allianz has been providing real estate loans for more than 30 years and its credit portfolio there currently exceeds €10 bn. The European lending book was started in 2011 and reached the €5 bn mark in Q1 2017.
The European financing strategy of Allianz Real Estate is based on the same criteria as for the direct or indirect acquisition of realty: it focuses on core and core plus properties in the retail, office and logistics sectors. The credit periods are 7–20 years with a loan-to-value ratio of 50–70%. The preferred financing volume is between €100 mln and €300 mln.
