Allianz Real Estate has taken a participation in the senior financing of the CityPoint tower in the City of London, as it continues to build a UK loan book.
The German insurer announced the participation as it reported €2.8 billion of real estate financing across the European and US markets during 2016.
Allianz declined to comment on the size of its participation in the CityPoint deal, but said that the investment was made on behalf of two Allianz entities. The CityPoint financing was arranged and underwritten by Morgan Stanley and sponsored by Brookfield Asset Management. In January, Morgan Stanley provided a five-year senior loan of around £334 million, with Cheyne Capital Management providing a mezzanine strip to take the full financing to £436 million, according to Xplore Markets. The 36-storey CityPoint is 90 percent occupied to a range of tenants including law firms.
The participation in the CityPoint deal brings Allianz’s UK debt exposure to around €300 million. The firm is targeting more exposure to the UK through both debt and equity investments. Its lending activity in the UK, prior to the CityPoint deal, had come through participating in pan-European portfolio financings.
“For Allianz Real Estate, this is the first single asset real estate debt transaction in the UK and represents a stepping stone towards our overall UK lending strategy. The implementation of our UK strategy will lead to further diversification of our European debt portfolio,” said Roland Fuchs, head of European debt.
Overall, senior financing grew by €900 million in Europe during 2016 and €1.9 billion in the US, increasing the AUM of the firm’s debt portfolio to €14.7 billion. Among last year’s deals, Allianz participated in a €366 million element of an initial €610 million pan-European financing of Invesco Real Estate, underwritten by Aareal.