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Allianz branches into Italy with Milan deal

Allianz Italy, the local arm of the German insurer, co-financed the property in Milan’s Piazza del Duomo.

Allianz Real Estate has made its first debt investment in the Italian market, participating in the financing of a mixed-use property in central Milan, arranged by French bank Natixis.

Allianz Italy, the local arm of the German insurer, co-financed the property in Milan’s Piazza del Duomo. The asset is owned by clients of CBRE Global Investors.

In June, Real Estate Capital reported that Natixis had provided a loan understood to be slightly less than €140 million, arranged by CBRE Capital Advisors’ debt and structured finance team. Allianz did not disclose the size of its participation, but said the seven-year, fixed-rate loan is structured as a bullet facility.

In May, CBRE Global Investors announced that it had acquired Piazza Duomo 25 from Sviluppo Immobili Milano Centro. The seven-storey building contains 9,000 square metres divided between retail space leased long-term to H&M and vacant offices, which are due to be refurbished.

“This opportunity supports our pan-European expansion plans for debt,” said Roland Fuchs, European head of real estate finance at Allianz Real Estate. “The past year has seen us diversify geographically through recent loans into Spain, the Netherlands and the UK and reach €5 billion in the first quarter of 2017. Through Duomo we are entering Italy, the next step in our strategy.”

Last year, Allianz Italy invested in the Italian infrastructure market, refinancing the Mestre motorway bypass near Venice with a €400 million participation in a project bond. This year, alongside Allianz Capital Partners and other partners, the Italian unit acquired a minority stake in motorway management company Autostrade per l’Italia from the Atlantia Group.

“As a long-term institutional investor, we are pleased to have finalised this [Duomo] deal, which marks our first opportunity in Italy to diversify our investments’ portfolio in the property lending segment and confirms the attractiveness of the Italian market for our group,” said Klaus-Peter Roehler, CEO of Allianz Italy.

Allianz Real Estate has more than €50 billion of global assets under management through direct and indirect real estate equity and debt. The firm’s commercial real estate lending portfolio, concentrated on Europe and the US, totals €15 billion, of which €10 billion relates to the US.

While the firm has been lending in the US for 30 years, its European property lending strategy was launched in 2001 and its loanbook reached €5 billion in Q1 2017. Allianz provides seven- to 20-year finance for core properties between loan-to-value ratios of 50 percent and 70 percent.