This European Lender Is Still Up For Big-Ticket London Loans

Slowly but surely, Allianz is building up its London loan book, and is becoming one of the few European lenders willing to write big-ticket loans against properties in the UK capital.

Many German lenders are pulling back from London due to uncertainty about Brexit. While Allianz has held back on UK equity investments outside of the student housing sector, it is building up a significant London office loan portfolio, with a focus on larger loan sizes.

This week the company said it had provided a €200M (£173M) loan to Starwood Capital to finance its £256M purchase of South Bank Central, a tower with 230K SF of office space and 33K SF of retail space. The scheme is fully let and the purchase price represented a yield of 5.5%.

Earlier this year it bought an undisclosed portion of the £334M of debt secured against Brookfield’s Citypoint Tower in the City.

In 2018 it provided a senior debt facility to refinance Blackstone's 500K SF office-led St Katherine Docks scheme on the eastern edge of the City. The loan size was not revealed, but with the scheme valued at £400M+, the loan is likely to have been at least £150M.

The debt provided by Allianz is split into a senior term loan and a capital expenditure line to redevelop Devon House, a 90K SF building on the estate, the rest of which is close to 100% occupancy.

Earlier in 2018 it provided £50M of senior debt as part of £100M of development finance to fund the construction of 80 Fenchurch St., one of the few speculative developments in the City right now.

And in 2017 it provided a £212M facility to refinance the 531K SF office building at 55 Baker St., owned by London & Regional.

Outside of London, earlier this year it provided a £128M development finance facility to fund the construction of a 1,462-bed student accommodation scheme for the University of Hull.

To hear Allianz’s view on London and the UK, join the Bisnow London Capital Markets Review on 21 May, where Allianz head of real estate François Trausch will be among the speakers.