Club deals for big-ticket financing transactions are likely to gain favour among new property lenders such as insurers, according to Ad Buisman, partner and EMEIA head of real estate at Ernst & Young.
Club deals for big-ticket financing transactions are likely to gain favour among new property lenders such as insurers, according to Ad Buisman, partner and EMEIA head of real estate at Ernst & Young.
Last summer, German insurer Allianz 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. ‘This is an add-on for an insurance company which doesn’t have the loan origination platform that a bank has,’ Buisman said. ‘I think we will see more of these club deals or forms of cooperation for big-ticket loans, maybe even with pension funds. Different parties will work together on different structures.’
Jan-Evert Post, member of the global management team at ING Real Estate Finance, sees scope for further partnerships between new property lenders and the banking sector. ‘If you really want to make a dent in the funding gap, you can’t do it alone. We’re also keen to learn how we can contribute to deploying those insurers’ funds and would like to assist and help bring new lenders to this market.’
Post noted that client relationships were key in the financing sector and that this was not typically something that insurers bring to the table. While similarities exist with regard to portfolio management, banks play a vital role in the rest of the value chain as well, he argued, pointing to the skills required to execute a transaction, provide documentation and due diligence. ‘Banks have back offices for the processing of interest payments and repayments. Many insurers don’t have that infrastructure and will need to turn to banks or other agents to take care of that part of the business.’
Christian Delaire, CEO of AEW Europe, is also keen to forge further links with the banking sector. His company recently set up a senior debt fund and is poised to do more in the debt space. ‘We have a lot of complementary skills and want to build partnerships with banks. That’s good for them and good for us. What we think we can bring as well is a capacity to underwrite the underlying assets. On our first loan in August for our first senior fund, our contribution was well received, using the local teams we have as well. We view this as a very complementary business.’
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