Aareal to underwrite €650m pan-European financing for Invesco

Aareal Bank is to provide a loan of as much as €650 million to global real estate investment manager Invesco Real Estate, in one of 2016’s largest European lending deals, Real Estate Capital has learned.

Aareal Bank is to provide a loan of as much as €650 million to global real estate investment manager Invesco Real Estate, in one of 2016’s largest European lending deals, Real Estate Capital has learned.

Aareal HQThe loan, which is due to close imminently, will refinance Invesco’s circa €2 billion pan-European open-ended real estate fund and provide capital for future investments.

Although Aareal is underwriting the pan-European financing, it is understood that the deal will be syndicated, with German insurer Allianz Real Estate thought to be in the frame. The pair financed NorthStar Realty Finance’s acquisition of a prime European office portfolio in one of 2015’s landmark lending deals.

The final make-up of the deal is yet to be determined, although Real Estate Capital understands that it will be relatively conservatively geared at about 35 percent loan to value, and it is a 10-year, fixed-rate loan.

The complex financing involves multiple currencies and underlying properties across European jurisdictions.

As well as financing standing properties from within the fund, it will also provide Invesco with capital to make further investments. Eastdil Secured has advised on the financing, which is known in the market as ‘Project Bedrock’.

Invesco’s flagship European open-ended real estate fund had total assets under management of around €2 billion in February 2016 when the fund paid €358 million for 11 hypermarkets in Northern Spain.

In the NorthStar deal, Aareal announced in April 2015 that it had provided a €530 million seven-year senior financing to NorthStar for its €1.1 billion acquisition of a core office portfolio from SEB Asset Management, known as Savills Investment Management. The volume of the deal was subsequently increased to €630 million.

Allianz’s involvement was announced later, in July 2015, when it was confirmed that the insurer had taken a €365 million share of the deal. The underlying 186,000 square metre office portfolio was comprised of eleven office buildings in Brussels, Paris, Hamburg, Milan, Amsterdam, Rotterdam, Gothenburg and London.

Speaking about that deal at the Real Estate Capital Finance Forum Europe 2016 in September, the two lenders said that the work they did in order to successfully structure the complex deal, including dealing with issues such as cross-collateralisation, opened the possibility of working together in future transactions.

All parties declined to comment on the Invesco financing.

SHARE