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Allianz provides €290m loan to BVK for Dublin’s Liffey Valley

The insurer acted as sole lender, providing a seven-year fixed-rate loan.

Allianz Real Estate has provided a €290 million loan to German pension fund BVK Bayerische Versorgungskammer for the financing of Ireland’s Liffey Valley shopping centre.

The insurer acted as sole lender, providing a seven-year fixed-rate loan “at an attractive all-in rate and a conservative LTV”, Allianz said. It declined to provide further details of the financing package.

The long-term loan was made through a pooling platform from Universal Investment, on behalf of BVK.

Liffey Valley is a popular shopping centre in Dublin with an annual footfall of 10 million visitors. The centre includes more than 100 shops, restaurants, a multiplex cinema and about 3,600 parking spaces. Following its extension in 2016, it now comprises more than 72,000 square metres.

The Liffey Valley centre– and other top shopping centres in Ireland – are regarded as “attractive income generating investments” for pension funds and other investors, with yields of around 4 percent, according to Kelly O’Hara, head of real estate at Irish law firm Dillon Eustace.

“With the financing of Liffey Valley, Allianz has increased its exposure to the Irish retail market but at a conservative level,” O’Hara added.

“Ireland has provided attractive opportunities for Allianz through real estate investments in a short period of time,” said Roland Fuchs, European head of real estate finance at Allianz Real Estate.

“A combination of the Liffey Valley loan, our direct investment in Dundrum Shopping Centre and the €150 million loan for a Dublin portfolio of 11 office and one residential building made in 2015, has resulted in Ireland becoming a notable part of our portfolio,” Fuchs added.

Allianz Real Estate’s commercial lending portfolio is currently focused on Europe and the US and totals just over €15 billion. In the US, where Allianz has been providing real estate loans for more than 30 years, the credit portfolio currently exceeds €10 billion. The European lending book was started in 2011 and reached the €5 billion mark in Q1, 2017.

“We are still looking for direct investments and finance opportunities regarding dominant, large shopping centres in prime locations all over Europe, including Ireland,” a spokesman from Allianz said.

In Europe, Allianz Real Estate focuses on large, conservative and long-term tickets, with a preference for core and core-plus properties in the retail, office and logistics sectors. Loan periods range between seven and 20 years with a loan-to-value ratio of 50 percent to 70 percent. The preferred financing volume is between €100 million and €300 million.