Allianz extended its European €5 billion book of commercial real estate lending into Italy by co-financing a primary mixed use development in Piazza del Duomo, in central Milan.
This fixed-rate bullet structure is guaranteed by a mortgage with a maturity of 7 years. It has been provided by Allianz Italy. The asset is owned by clients of CBRE Global Investors. The financing was arranged and co-financed by Natixis, Milan while Allianz Real Estate implemented the transaction within Allianz.
"This opportunity supports our Pan-European expansion plans for debt" declared 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 €5bn in the first quarter of 2017. Through Duomo we are entering Italy, the next step in our strategy."
Klaus-Peter Roehler, CEO of Allianz Italy, comments: "As a long term institutional investor, we are pleased to have finalized this deal, which marks our first opportunity in Italy to diversify our investments' portfolio in the property lending segment and confirms the attractiveness of the Italian market for our Group. As Allianz, we can leverage an extraordinary and unique expertise in alternative asset investments, such as real estate, infrastructure, renewable energies and private equity. In the Italian infrastructure market, we already invested in 2016 on the first project bond issued to refinance the Mestre motorway bypass, and this year we are finalizing with Allianz Capital Partners and international partners the acquisition of a minority stake in Autostrade per l'Italia from the Atlantia Group".
The seven-story building in a top downtown location has about 9,000 sqm of floor space. The retail space has been let on a long-term lease while the offices will undergo repositioning.
With assets under management of over €50 billion spread globally through direct and indirect real estate equity investments and debt, property financing is an important pillar in real estate investments. Allianz Real Estate's commercial real estate lending portfolio is currently focused on Europe and the US. It totals about €15 billion worldwide. In the USA, Allianz has been providing real estate loans for more than 30 years and its credit portfolio there currently exceeds €10 billion. Whereas it´s European lending book was started in 2011 and reached the €5 billion 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 million and €300 million.