AEW Provides Financing For Central Munich Offices
AEW has invested €30m in senior secured debt financing for the purchase of a 40,000 sq m office block in Munich, the third-biggest office real estate market in Europe.
The investment is part of a senior loan totalling €147m to Blackstone, the deal sponsor, with a loan-to-value (LTV) of slightly below 60%.
This property underwent significant renovation in 2012 and is currently 85% occupied, with 26 separate tenants.
“We like the leasing profile. A number of good tenants in such a dynamic market as the Munich market tend to provide more resilient cashflow than a single tenant,” says Sylvain Deschamps, debt fund manager at AEW, an affiliate of Natixis Investment Managers.
Given the trend witnessed in Munich over the last few years of higher rental income and the low supply there is high reversion potential for rental income, given that the rents paid for tenants in the Munich property were set years ago. The Munich real estate market has indeed very low historical vacancy rates of less than 5%.
The Munich market also has inherent ESG advantages, with most properties in the city served by an electricity network which is powered by geothermic energy. “We see this as a clear advantage as the energy and environmental performance is at the core of our risk analysis,” says Deschamps. AEW, in common with its peers, will file an annual ESG report for the first time in 2023, under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
“This deal allows us to strengthen the share of German properties within the portfolio,” says Deschamps. “After this transaction and a recent one in central Paris, Germany and France will represent 60% of our portfolio, in line with our original target.”
Following this transaction and the previous deal in Paris, the AEW team has deployed more than 80% of its commitments. “It’s been a really strong 2022 so far,” adds Deschamps.
For Further Reading:
AEW SA
An affiliate of Natixis Investment Managers
Privately-held French "Société anonyme à conseil d’administration".
Real-estate investment manager under n°T 8324 delivered by the Prefecture de police de Paris.
Share capital: €17,025,900
RCS Paris: B 409 039 914
22 rue du Docteur Lancereaux 75008 Paris, France
www.aew.com
Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris
www.im.natixis.com
This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no guarantee that developments will transpire as may be forecasted in this material.
Copyright © 2022 Natixis Investment Managers S.A. – All rights reserved.
The investment is part of a senior loan totalling €147m to Blackstone, the deal sponsor, with a loan-to-value (LTV) of slightly below 60%.
This property underwent significant renovation in 2012 and is currently 85% occupied, with 26 separate tenants.
“We like the leasing profile. A number of good tenants in such a dynamic market as the Munich market tend to provide more resilient cashflow than a single tenant,” says Sylvain Deschamps, debt fund manager at AEW, an affiliate of Natixis Investment Managers.
Given the trend witnessed in Munich over the last few years of higher rental income and the low supply there is high reversion potential for rental income, given that the rents paid for tenants in the Munich property were set years ago. The Munich real estate market has indeed very low historical vacancy rates of less than 5%.
The Munich market also has inherent ESG advantages, with most properties in the city served by an electricity network which is powered by geothermic energy. “We see this as a clear advantage as the energy and environmental performance is at the core of our risk analysis,” says Deschamps. AEW, in common with its peers, will file an annual ESG report for the first time in 2023, under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
“This deal allows us to strengthen the share of German properties within the portfolio,” says Deschamps. “After this transaction and a recent one in central Paris, Germany and France will represent 60% of our portfolio, in line with our original target.”
Following this transaction and the previous deal in Paris, the AEW team has deployed more than 80% of its commitments. “It’s been a really strong 2022 so far,” adds Deschamps.
For Further Reading:
- AEW finances “Altbau” residential buildings in Berlin
- AEW Finances Four Prime Logistics Hubs in Italy
- AEW Participates in Pan-European Green Loan
- AEW Finances Pan-European Logistics Deal
- AEW consolidates real estate debt platform ahead of planned growth
- AEW and Natixis IM in Refinancing of Iconic ENI Headquarters
- Real Estate Debt Helps Investors Ride out Crisis
- AEW/Ostrum AM Invest €64m in German Residential Property
- Covid-19: What is the impact on Commercial Real Estate Debt in Europe?
- AEW and Ostrum Asset Management complete final investments in Senior European Loan Fund II (SELF II)
- Bricks, Mortar and Loans
- Real Estate Debt is the Real Deal
An affiliate of Natixis Investment Managers
Privately-held French "Société anonyme à conseil d’administration".
Real-estate investment manager under n°T 8324 delivered by the Prefecture de police de Paris.
Share capital: €17,025,900
RCS Paris: B 409 039 914
22 rue du Docteur Lancereaux 75008 Paris, France
www.aew.com
Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris
www.im.natixis.com
This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no guarantee that developments will transpire as may be forecasted in this material.
Copyright © 2022 Natixis Investment Managers S.A. – All rights reserved.