30 December 2015

Delta Lloyd gets out of commercial property

Delta Lloyd has completed the divestment of its commercial property portfolio with the sale of its retail portfolio to the European Property Investors Special Opportunities 4 (EPISO 4) fund advised by Tristan Capital Partners.

The portfolio was sold for €273m ($298m) and consists of 15 retail centres and premises at prime locations in the Netherlands.

As a result of the sale, Delta Lloyd's direct property investments are now entirely focused on residential property, the Dutch insurer said.

In November, Delta Lloyd sold its office investment portfolio for €226m to First Sponsor Group.

Both transactions are expected to have a limited impact on the group's solvency ratio, according to Delta Lloyd.

"The sale of the retail and office portfolios is part of the management actions announced for our transition to Solvency II," Hans van der Noordaa, chairman of Delta Lloyd's executive board, said.

"The actions we are taking, which, among other things, will improve our risk position, are progressing to our satisfaction. By now, we have disposed of around €500m of commercial investment property, and this will help to simplify our property portfolio and reduce the risks in our investment portfolio."

At the end of November, Delta Lloyd announced a rights issue of about €1bn for late February 2016 and said it was planning a number of capital management actions to bolster its capital, including cutting its exposure to commercial real estate (InsuranceERM, 30 November 2015, Delta Lloyd makes u-turn on internal model application).