Allianz acquires stake in DOOR fund
Allianz Real Estate, acting on behalf of several Allianz Group companies, has acquired a 21.5 per cent stake in the Delancey Oxford Residential (DOOR) fund.
DOOR is a dedicated residential investment vehicle which owns 39 per cent of Get Living, the UK’s leading build-to-rent operator of large-scale residential neighbourhoods and the UK’s most successful Private Rental Sector (PRS) platform.
DOOR, co-sponsored by Oxford Properties Group and Delancey Real Estate Asset Management Limited, owns Get Living alongside Dutch asset manager APG and Qatari Diar. Allianz Real Estate has invested GBP260 million into the platform.
The investment by Allianz brings DOOR’s equity commitments to GBP1.2 billion. The capital will be used to invest in Get Living’s existing pipeline and future acquisition opportunities. Get Living, which is targeting up to 12,000-14,000 homes, currently has c2,900 PRS units (89 per cent in London) with a pipeline of an additional c4,500 to be developed over the next five years in London, Manchester, Glasgow and Leeds.
Allianz Real Estate believes the PRS sector in the UK, as well as in markets such as the US and Japan, is highly attractive, driven by positive demographic trends, a demand/ supply imbalance, and affordability issues boosting demand for rentals. Covid-19 has underscored the strength of the sector, with collection rates having held steady for listed UK and European PRS companies.
The acquisition of the DOOR stake adds significant momentum to Allianz Real Estate’s London-centric UK portfolio. Having grown the London-based team considerably over the last year, recent deals include the GBP140 million financing for the development of 33 Charterhouse Street for Helical Plc and the GBP120 million in debt financing to The Office Group for the acquisition and refurbishment of Chancery House. In June 2018, it partnered with Greystar and PSP in a joint venture to grow Chapter, London’s premier student accommodation brand.
“The UK continues to be a core market for Allianz Real Estate, and we are focused on increasing our exposure in London through the living segment and the office sector. We continue to build on a broader UK exposure to the logistics segment. We believe our local team of experts places us at an advantage to source high quality investments and we expect continued activity across 2020 and into next year,” says Kari Pitkin, Head of Business Development for Europe, Allianz Real Estate.
“We have a strong belief in the multi-family sector in gateway cities across the globe and the UK’s living segment is no exception. This investment in DOOR is very complementary to our Chapter portfolio of student housing across London. We are delighted to be increasing our exposure to the asset class through a market-leading, prime investment vehicle with a strong track record.”
Joanne McNamara, Head of Europe at Oxford Properties, says: “To have secured these significant commitments from high-quality institutional investors in the current market is a strong endorsement of the quality of the Get Living platform, of our strategy and our ambitions to scale the business. The residential rental sector has demonstrated its resilience during the pandemic and the long-term fundamentals underpinning the asset class remain unchanged.
“Having also completed our latest transaction in Lewisham - Get Living’s third London neighbourhood project - we now have strong momentum behind us to continue our expansion as part of Oxford’s global diversification strategy to invest into demographically-supported asset classes such as multifamily.”
DOOR, which was seeded with £600 million of capital from Oxford and DV4, acquired a 39% stake in Get Living in August 2018. DOOR subsequently selectively approached large-scale like-minded strategic capital to participate alongside their initial investment.
Get Living recently announced a £252 million forward funding deal to accelerate the delivery of the second and final phase of Lewisham Gateway, one of the largest regeneration schemes in the South East. It will take the total number of homes within Get Living’s management and pipeline to more than 8,000 homes across four cities.
Get Living currently comprises approximately 2,900 operational homes, mainly across two London schemes at East Village, the former London 2012 Athletes’ Village at Queen Elizabeth Olympic Park in Stratford, and Elephant Central in Elephant and Castle, with a smaller neighbourhood, New Maker Yards, at Middlewood Locks, Manchester. The portfolio also features approximately 1,800 homes currently under construction and a secured development pipeline of 3,500 homes, located at East Village, Elephant & Castle, Lewisham and Middlewood Locks, as well as two sites in the key regional cities of Glasgow and Leeds. Delancey and Qatari Diar act as Development Managers on the various schemes.