German insurer Allianz's real estate arm has announced the launch of a Luxembourg regulated platform along with its first debt fund to 'satisfy the appetite for debt of smaller Allianz companies as well as external investors'.
The fund - the first Allianz Real Estate initiative that will also include third-party investors, external to the Allianz group - has signed its first two transactions valued at around €300 mln; the financing of St Katharine Docks in London and the €281 mln refinancing of Noventa di Piave in Italy to outlet specialist MacArthur Glen.
In London in particular the vehicle teamed up with Brookfield to provide a five-year, floating-rate facility to private equity giant Blackstone.
'Our debt platform has been developed using the highest industry standards and partners,' said Roland Fuchs, head of European debt at Allianz Real Estate. 'Our initial focus is on our Allianz clients, especially the smaller companies whose investment size has made it difficult for them to participate in the individual debt deals. From there we plan to offer access to our capability to third parties, providing them with the opportunity to invest in debt alongside Allianz.'
The move is part of a wider expansion drive for Allianz Real Estate which has increased its assets by around 10% over the past six months, surpassing €60 bn from €56 bn at year-end 2017. Allianz's financing business reached €17.6 bn across the US (€10.8 bn) and Europe (€6.8 bn).
The last 12 months have also seen Allianz introduce new strategies like forward purchases in Europe (The Icon in Vienna and Kap West in Munich) and enter new markets such as India, London and the Chinese office market.
'We passed our 2020 target AuM of €60 bn 18 months ahead of schedule, positioning us well for our ambitious growth plans across established and new territories and asset classes,' Francois Trausch, CEO of Allianz Real Estate, said at Expo Real. 'Allianz continues to find real estate an attractive asset class and the launch of our debt fund will further support our aspiration to exceed €100 bn over the next five years.'
The growth in assets under management illustrated the appetite for real estate and was also driven by strong occupancy in most of the markets the division invests in, added Trausch.
Another factor, he said, was ‘the capabilities of large investors like Allianz to grow by adding new sectors every year.’ This year, Allianz Real Estate has taken stakes in student housing in the UK, via Greystar and PSP’s Chapter, and in Australia with Scape. ‘That is €2 bn that we deployed, that we didn’t have to deploy in core offices. The beauty of it is we don’t have to do the same thing over and over again’, Trausch said.
'We continue to manage our growth in a selective way,' added chief investment officer Olivier Téran. 'Our historic strength in the European office sector continues to be the bedrock of our portfolio, but we employ joint ventures and indirect investments to access value add and opportunistic investments across Europe, the US and Asia alongside the direct equity ownership of core properties.'
