Allianz finances development of 2.4m sq ft portfolio of build-to-core UK logistics assets

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Allianz Real Estate, acting on behalf of several Allianz group companies, has provided GBP240 million (EUR280 million) in debt funding to BentallGreenOak, working with Equation, to support the development of a build-to-core portfolio of eight prime logistics assets in the UK. 

The financing meets the criteria to be classed as a green loan and has been made through Allianz Real Estate’s Luxembourg-based European debt fund.

The 2,388,086 sq ft portfolio is located in key UK locations of Milton Keynes, Felixstowe, Basildon, Bristol and Wembley, with all sites benefiting from access to primary transportation routes. The Wembley asset will be based in Park Royal, London – Europe’s largest multi-owned industrial estate with around 1,700 businesses employing 43,100 people in sectors including food, transport and manufacturing.

Each of the properties will meet stringent ESG criteria, targeting EPC A and BREEAM Excellent Certification. They will also undergo a Carbon Risk Real Estate Monitor (CRREM) assessment to ensure they are in line with UK decarbonization and energy reduction pathways. CRREM is aligned with the requirements of the Paris Agreement to limit global warming to 1.5C.

The logistics sector remained the most resilient of the main commercial property sectors in the UK in 2020, showing investment volumes of just over GBP10 billion, slightly below the previous peak of GBP11 billion in 2017. The UK is forecast to record the highest development completions in 2021 with 40 million sq ft set to be delivered.

BentallGreenOak is a global real estate investment management advisor serving the interests of more than 750 institutional clients with approximately USD69 billion of assets under management. The firm, which has offices in 24 cities across 12 countries, is a part of SLC Management, the alternatives asset management business of Sun Life. Allianz Real Estate already has an established lending relationship with BentallGreenOak in the US.

Allianz Real Estate saw its European debt portfolio grow to EUR10.6 billion in assets under management as at the end of June 2021, up by around 18 per cent year-on-year, with capital deployed by its European debt fund, PAREC, increasing to more than EUR4 billion.

Shripal Shah, Head of Real Estate Finance UK at Allianz Real Estate, says: “This is our first transaction with BentallGreenOak in Europe and extends the lending relationship for Allianz with a prime, like-minded and highly reputable partner. These will be core, well-located and sustainable assets catering for a fast-growing market.“

Roland Fuchs, Head of European Real Estate Financing at Allianz Real Estate, says: “European debt remains a fundamental driver of growth for Allianz Real Estate. Our dedicated approach and market experience make the firm well-positioned to meet institutional demand across asset classes and asset types. Our expectation is that lending will remain strong as economies recover and new requirements such as ESG mean borrowers look to work with prime partners such as Allianz.”

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