Allianz builds London exposure with first office equity investment

Allianz Real Estate, acting on behalf of several Allianz group companies, has increased its London exposure via its first office equity investment in the city, acquiring a 75 per cent interest in a three-building portfolio owned by British Land, who will retain the remaining 25 per cent as part of a joint venture. The purchase price was GBP401 million (EUR450 million).

The three assets – 10 Portman Square, Marble Arch House and York House – are located in Marylebone in London‘s West End. As one of the most stable office markets in the city with limited future supply compared to the rest of London, it will also benefit from close proximity to access to the Elizabeth Line. Constructed between 2007 and 2014, the fully let, 29,000 sq m portfolio offers contemporary design in line with tenant requirements. The buildings are BREEAM certified and fulfil the CRREM benchmark.

This acquisition is the latest in building out Allianz‘s exposure to the UK and Ireland, and London in particular. The firm has constructed a GBP4.3 billion footprint in both equity and financing transactions, across multiple sectors.

Annette Kroeger, CEO Region North & Central Europe at Allianz Real Estate, says: “Adding offices to our already established logistics, residential and student accommodation platforms rounds out our UK equity portfolio, augmenting the fantastic work executed by our European Debt team. We‘re excited and proud to have been able to achieve so much in the UK since we opened our London office in June 2019.“

Recent UK deals include, on the equity side, a GBP260 million develop-to-core logistics venture with AEW; a GBP 260 million, 21.5 per cent stake in the DOOR residential investment vehicle; and a GBP350 million investment in Chapter‘s student accommodation expansion program; and, on the debt side, a GBP400 million refinancing of Lazari‘s five-office portfolio; GBP139 million financing for the development of Charterhouse Square for Helical plc; GBP81 million financing for GLL Real Estate’s purchase of Bishop’s Square office; and GBP120 million financing for The Office Group’s (TOG) acquisition and refurbishment of Chancery House.

Looking ahead, London, as one of the world‘s top 24/7 cities, remains in focus for Allianz Real Estate as it seeks further direct investments and to support its strong existing portfolio of prime partners.

Kari Pitkin, Head of Business Development for Europe at Allianz Real Estate, says: “Our conviction in London as an investment destination continues to grow. We will continue to look for opportunities to expand across all our current platforms. As long-term investors, we focus on the more resilient sectors and assets, particularly those which are fit to meet future tenant requirements around user experience and wellbeing, innovation, flexibility and ESG. Our focus will be on diversified core, manage-to-core and develop-to-core strategies within London.“