Allianz SE, Europe’s biggest insurer, plans to increase European commercial property lending to 1.5 billion euros ($2 billion) this year as the company seeks to boost investment returns.
Allianz Real Estate will make about seven loans in France and Germany, spokeswoman Melanie Epp said today. By 2015, the Munich-based company plans to have 5 billion euros of European lending on its balance sheet. In 2012, the company made five loans valued at about 1 billion euros in Germany, she said.
Allianz and other insurers are attracted by the higher interest income generated by commercial property loans compared with government bonds. Banks, which dominate property lending in Europe, are pulling back after incurring losses in the financial crisis. That has forced real-estate borrowers to look elsewhere for refinancing and new funds.
Last year, Allianz and two other banks lent 650 million-euros to the owners of the Centro shopping mall in western Germany. The company has about 5 billion euros of loans to U.S. property investors.
Allianz is already one of the most active buyers of European commercial buildings. Last year, it bought shopping malls and offices in Germany, France and Poland valued at about 1.8 billion euros. The company has said it plans to increase real estate assets to about 30 billion euros.
The news was first reported by Co-Star Group Inc.