Allianz expands debt portfolio with GBP400m financing of five central London offices
Allianz Real Estate, acting on behalf of several Allianz group companies, has completed its largest single-loan debt transaction in Europe. This latest long-term financing is of a portfolio of five prime freehold central London offices with a loan of GBP400 million (EUR440 million).
The portfolio is fully owned by Lazari Investments, which owns and manages multiple portfolios of real estate assets in central London.
This transaction is significant for a number of reasons, not least for its size as a portfolio loan deal. Totaling more than 630,000 sq ft, the portfolio represents good quality office assets in prime locations let to investment grade tenants across a range of industry sectors with a WAULT (weighted average unexpired lease term) of 12 years. It is the first transaction between Allianz and the Lazari group, a likeminded investor which has adopted a long-term strategy based on active asset management of a defensive portfolio of central London office assets.
Allianz Real Estate has now established a four-strong London debt team, covering both origination and local loan asset management. This new deal is the seventh debt transaction in London and it is the third since it opened its London office in June 2019. London remains one of the most liquid global investment markets and in 2019 it was one of Europe’s most active commercial property markets. Recent UK deals include the GBP 139 million financing for the development of Charterhouse Square for Helical plc, and the GBP 120 million in debt financing to The Office Group for the acquisition and refurbishment of Chancery House.
The financing of these five assets is one of the latest deals to be completed through Allianz Real Estate’s Luxembourg-based debt fund PAREC, which was launched in 2018 to simplify access to European real estate debt investments for Allianz group insurers and third-party investors. The transaction means that the fund now has approximately EUR3.4 billion in assets under management.
“This portfolio of five prime freehold central London offices reaffirms our commitment to the London market and its importance in driving our long-term investment strategy,” says Shripal Shah, Head of Debt Origination - London, Allianz Real Estate. “Despite the current environment, the UK market continues to offer excellent opportunities for investment, with London in particular remaining one of Europe’s most active and attractive property markets.”
“We are delighted to be expanding our European debt fund portfolio with a like-minded counterpart such as the Lazari group, with whom we share our belief and willingness to partner together for the longer term,” says Roland Fuchs, Head of European Debt, Allianz Real Estate. “Our European debt business pursues its prime oriented, resilient and sustainable debt investment strategy on a pan-European level whilst continuing to take a disciplined approach to growing our portfolio of high-quality assets.”