Aareal agrees €1bn Invesco financing

Aareal Bank has confirmed that it has agreed a €610 million loan, with the ability to extend it to €1 billion, which Real Estate Capital recently reported will finance Invesco Real Estate’s open-ended pan-European fund.

In a statement this morning (5 December), Aareal and Invesco announced the deal, which has a term of 10 years. A total of €610 million has been drawn down, although the agreement provided flexibility to extend the facility by as much as €390 million.

Aareal Bank said that it “has the flexibility” to syndicate parts of the facility to one or more strategic partners. As previously reported by this publication, Allianz Real Estate is thought to be in the frame to join Aareal in this deal, although the German insurer’s participation is yet to be confirmed.

Aareal and Allianz jointly financed NorthStar Realty Finance’s acquisition of a prime European office portfolio in one of 2015’s landmark lending deals, which was initially underwritten by Aareal.

The new facility will finance an Invesco Real Estate pan-European mandate, according to the announcement. It will finance 27 properties in seven European countries. The portfolio is located in the UK, Spain, France, Germany, Italy, the Netherlands and Poland, according to a statement by law firm Norton Rose Fulbright, which advised Invesco.

Although the pricing of the loan was not divulged, Andy Rofe, Invesco Real Estate’s managing director for Europe, said that the financing provides the firm with the security of locking in “low interest rates” for a 10-year period.

The financing also makes debt available to Invesco for investment opportunities as it seeks to grow the fund from its current €3 billion of assets under management, Rofe explained. It also provides the flexibility to sell properties on the completion of business plans.

“For us, this is a ground-breaking project in our industry, which creates a loan facility that fits both the profile and nature of our very large and growing, high quality and diverse, pan-European mandate with properties in some of the strongest locations in the UK and Europe,” said Rofe.

Severin Schöttmer, Aareal’s managing director for special property finance at Aareal Bank, added: “This benchmark financing is a further milestone in financing large-volume cross-border transactions. We are delighted that our expertise puts us in a position to offer our long-standing and trusted client and partner Invesco Real Estate this flexible financing solution.”

Eastdil Secured advised Invesco on the transaction.

Per Mario Floden, director at Eastdil Secured, commented: ”This is a unique, dual currency, secured facility designed to mimic the flexibility of an unsecured financing and gives IRE unprecedented freedom to manage the properties and the portfolio composition over the life of the loan.”

Invesco Real Estate has $71.3 billion of assets under management globally and manages 130 assets in 13 European countries.