The venture, an Allianz-owned separate account vehicle managed by AEW, will focus on units of 200,000 sq ft or larger in prime locations in the UK. The venture is being managed by Allianz Real Estate on behalf of Allianz group insurance companies, who have committed EUR290 million in total.
AEW and Allianz Real Estate have already identified a number of potential opportunities with a primary focus on established core logistics locations throughout the UK.
One of the first investors in logistics, AEW created the LOGISTIS platform for Continental Europe back in 1999. Following a develop-to-core strategy, LOGISTIS has progressively scaled-up its portfolio to build a prime platform with total value reaching EUR3.5 billion. This new mandate seeks to replicate the strategy in the UK, leveraging both AEW’s track record in logistics developments and current market dynamics.
Allianz Real Estate, the real estate investment and asset manager of the Allianz Group, has materially increased its exposure to the logistics sector over the past few years. They consider logistics as a key global trend and assess through both direct and indirect investments. Logistics accounted for EUR5.6 billion of the firm’s total AuM as at 31 December 2018.
In February this year, Allianz announced that it had partnered with CBRE Global Investment Partners to acquire a Nordic logistics portfolio. In November last year, the firm completed the acquisition of a logistics hub in Northern Italy and completed two significant transactions in Asia: a 50% stake in a portfolio of core modern logistics assets in China and a partnership with ESR Group in India.
Olivier Téran, Chief Investment Officer, Allianz Real Estate, said: “With the favourable backdrop of limited availability and increasing tenant demand for larger format warehouses, AEW and Allianz Real Estate have identified a clear opportunity to build a portfolio of core assets in the UK. This new venture reflects Allianz’s focus on working with prime partners such as AEW and diversifying our portfolio with regards to the in-demand logistics sector.”
Nick Winsley, Head of Investments at AEW UK Investment Management, commented: “The timing is right to launch this develop-to-core strategy. In a market where significant pools of capital continue to focus on a limited supply of investment stock or pre-let fundings, our strategy is to fund the development of larger buildings on a speculative basis.”
Allianz Real Estate were advised by Herbert Smith Freehills while Mishcon de Reya advised AEW.