Appetite for 'big ticket' loans returns in Germany

German insurer Allianz has teamed up with German banks Aareal Real Estate and Helaba to provide a EUR 650 mln loan facility secured against Oberhausen-based shopping centre, Centro, in what is shaping up to be the biggest retail real estate loan of the summer.

'It's the biggest loan we have seen so far this summer and demonstrates how insurers like Allianz are bridging the lending gap as banks withdraw,' Anke Kaukars-Haverkamp, a national director on JLL's shopping centre investment team in Frankfurt, told PropertyEU. 'This is a great opportunity for Allianz to invest in one of the best core shopping centres in Germany, the sort of centre they would also buy for their funds,' she added. JLL did not advise on the transaction.

The financing was provided to a joint venture between Florida-based investor, the Stadium Group, and the Canadian Pension Plan investment board, who jointly own the EUR 1.3 bn shopping centre in the heart of Germany’s Ruhrgebiet. The loan is secured against the entire shopping centre, including the 17,000 m² extension that is due to open at the end of September and which will be anchored by fashion retailer Peek & Cloppenburg. Allianz provided EUR 325mln of the facility, with Aareal and Helaba each providing an additional EUR 162.5mln.

Around 12 million people live within an hour’s drive of the 160,000 m² centre, providing it with a sizeable catchment area. Aareal acted as facility agent, Helaba as security agent and co-agent and Barclays and Santander as arrangers.

And although some banks have reined in their lending, this club deal suggests that appetite is slowly returning for ‘big ticket’ loans. 'Two years ago, it would have taken three banks to finance a EUR 300 mln deal,' said Kaukars-Haverkamp. 'Here, three lenders financed EUR 650 mln. Banks will take on bigger ticket deals but only for very core properties.'

Nonetheless, despite strong demand for core properties, there is little coming to market and sale volumes have fallen dramatically since last year, when around EUR 10 bn in retail deals were transacted in Germany, of which EUR 4.5 bn were shopping centre deals, according to JLL. In the first half of 2012, just EUR 2.8 bn of retail deals were transacted in Germany, although JLL is forecasting that as much as EUR 8 bn in deals could be completed before the year-end.