Allianz enters Irish RE market with €150m loan

The real estate manager has up to €2bn available to invest in European real estate debt annually.

Allianz Real Estate has extended its first loan in Ireland, the firm announced.

The manager, which invests in real estate assets for Allianz insurance companies, has provided a five year €150 million floating rate loan, which is “moderately” leveraged, Roland Fuchs, head of European real estate finance, told PDI.

The loan from Allianz forms part of a €300 million financing package extended to Starwood Property Trust to acquire a portfolio of 11 office buildings and one residential property in Dublin. US bank Morgan Stanley arranged the loan. The other parties behind the remainder of the €300 million financing were not disclosed.

The 55,800 square metre portfolio includes approximately 530 parking units in Dublin city centre. “The assets are all located in a thriving area in the city centre of Dublin and are almost fully let to high quality credit-rated or government-linked tenants,” according to the statement.

Sponsor Starwood acquired the portfolio from Lone Star earlier this year, PDI understands. The €350 million deal is the first involving an American Real Estate Trust in the country, the Irish Independent reported in March, and includes the Watermarque Building in Ringsend with tenants such as AirBnB and Betfair. Chinese insurer Ping An is also said to have bid on the portfolio.

The partnership between Allianz and Morgan Stanley highlights the way banks and institutional investors are increasingly working together in Europe.

In the past two years, Fuchs said he has observed a growing number of combinations with more and more traditional bank lenders and insurance companies or debt funds sharing a deal, with Fuchs branding these new lenders “the new kids on the block”.

“Two years ago everyone was talking about it… now it is clearly becoming a reality,” Fuchs said.

The trend, which has been evident in the US for years, and in the UK and France more recently, is now sweeping across continental Europe, he continued, and is reflective of a tremendous amount of liquidity in the market. “Now it is getting into the smaller markets like Ireland,” he added.

Allianz provided the loan by partaking in a syndicated facility, one of the ways it sources deals, Fuchs said. It also sources deals directly from sponsors or via club deals with bank partners.

Allianz operates its debt business out of Paris and Munich. Ireland is the tenth country in Europe the real estate investor has made a real estate loan into. It has been active in commercial real estate in the US for 30 years and in 2011, expanded into Europe, starting in Germany and France. Since late 2014, it has been providing commercial mortgages in Spain and the Netherlands. Other markets include Italy, Belgium, Austria, Sweden and the UK. The firm provides financing on commercial property such as office, retail and logistics.

The firm has plans to further expand its commercial real estate finance business in Europe. Fuchs adding the business has an annual budget of between €1 billion and €2 billion for European real estate debt investments.

“Our business plan foresees that appetite is really strong. Our portfolio almost doubled in the past 12 months for the continental European loan book,” he said.

The manager provides minimum ticket sizes of €100 million, with loan-to-value in the region of 50 to 70 percent, and currently has a loan book of about €3.5 billion spread over 10 European countries. In the US, it oversees a loan book of around €7.5 billion, according to its website.

The firm invests on behalf of various Allianz insurance companies including life insurance as well as property and casualty insurance companies, for which it invests the premiums of their clients, Fuchs said. Life insurance companies typically look for loan investments with a long-term profile while property and casualty insurers seek more short- to medium-term investments.