Allianz Real Estate, one of the world’s largest real estate investment managers, has continued to deliver a strong performance in the UK fueled by compelling investment opportunities in office, logistics and residential sectors. In the three years since the firm opened its London office in 2019, UK assets under management have grown to EUR 5.2 billion as at the end of Q1 2022, up 40% compared to Q1 2021, with momentum continuing into the year.
The firm has continued to deliver portfolio growth across both equity and debt and further diversify outside of its traditional core office sector through some of its most significant European transactions, including its first private rented sector (PRS) debt transaction in Europe and several logistics transactions, consolidating a leading market position in the sector.
Kari Pitkin, Head of Business Development Europe, Allianz Real Estate, said: “Since Allianz Real Estate opened the London office in 2019, we have seen exceptional demand from our investors and strong opportunities in the market. Appetite remains strong and we continue to be very active in the UK in terms of transaction volume. Our London team has grown to 14 members, up from just four at the end of 2020, in order to meet the increasing demand from internal and external stakeholders.
We believe our focus on quality assets and working with prime partners differentiates us in the market, particularly as all stakeholders are now aligned to best-of-breed ESG criteria. Looking ahead we expect growth to accelerate given London and the UK remain one of the world’s most attractive markets.”
Major recent equity transactions include the firm’s forward acquisition of Frontier Park, a 760,000 sq ft logistics facility in Milton Keynes; and a joint venture with Aviva Investors to develop two Grade-A, prime office buildings in the City of London with a GDV of c. EUR 580 million.
Recent high profile debt transactions include Allianz Real Estate’s provision of ca. EUR 230 million in financing to support the development of 105 Victoria Street, a 500,000 sq ft landmark ESG asset in central London; EUR 161 million to Canary Wharf Group for the financing of 10 George Street in Canary Wharf, Allianz Real Estate’s first single-asset PRS debt transaction in Europe; and EUR 280 million in debt funding to BentallGreenOak to support the development of a build-to-core portfolio of eight prime logistics assets.
Shripal Shah, Head of Real Estate Finance - UK, Allianz Real Estate, said: “Debt remains a key engine of growth for us in the UK, as it does across Europe. The firm has become one of the most active non-bank senior real estate lenders and one of very few who are able to lend on a pan-European basis. Looking ahead, our focus remains on building a prime, diversified portfolio that performs through cycles and over the long term.”
In Allianz Real Estate’s latest Cities That Work study published in December 2021, London was ranked Europe’s top city in terms of office sector investment opportunities.
London came out significantly ahead in the rankings, despite the impact of both Brexit and Covid-19. It ranked first for both global city status and human capital and is also set to disproportionally benefit from the rise of the tech sector and the predicted falls in prime core office vacancy rates.
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