François Trausch, CEO of Allianz Real Estate, commented: “The sophisticated nature of our clients means we are in a strong position to add new strategies each year. Our growth during the first half of 2019 underlines this approach as, alongside our impressive work in our core office sector, we have made significant investments in, for example, logistics and have increased our exposure to value-add. Here we see good value and pricing opportunities in the style, particularly with regards to the development of higher tech, more sustainable buildings. We have recently announced, for instance, new deals with developer EDGE Technologies in Hamburg and Berlin, as well as the redevelopment of our Corso Italia 23 asset in Milan, which set a benchmark for smart office buildings. The transaction in Berlin was also our first third-party equity deal and we expect more such deals looking ahead as we target EUR100 billion in AUM by 2024.”
Equity investment has increased from EUR44.2 billlion to EUR48.2 billlion, up 9.1% since the start of 2019, with strong equity growth across all three of its territories: Europe, the US and Asia Pacific. While Asia has seen the strongest relative growth over the past six months – up 20% to EUR3.6 billion for the half-year period – US equity exposure has increased 14% to EUR5.7 billion and Europe up 7.4% to EUR37.8 billion.
Major deals announced in the first half of the year include the acquisition of a 49% interest in an office condominium in New York’s iconic 30 Hudson Yards office building for EUR342 million; and the acquisition of the Castellana 200 prime mixed-use office and retail asset located in central Madrid, for EUR250 million. These were followed by the August announcement of the joint venture with Gaw Capital to acquire the marquee Duo Tower and Duo Galleria buildings in Singapore.
“While the global office sector remains our largest industrial allocation, we have announced a number of logistics deals in 2019 as global demand in quality logistics assets intensifies. Diversification continues to play a fundamental role in our investment strategy, depending on the best outcome for our investors and stakeholders. We have continued to benefit from this unconstrained approach,” said Olivier Téran, CIO of Allianz Real Estate.
The firm’s high-profile logistics transactions include: a EUR290 million partnership with AEW to invest in UK logistics; a USD600 million commitment to funds managed by GLP, a global investment management firm, investing in China and Japan, focused on investing in prime logistics assets with integrated technologies in China and Japan; and a EUR1.7 billion pan-European joint venture with VGP. The diversification theme was further present in the announcement of its expanded partnership with Scape to grow its exposure to the student housing sector in Australia, adding to existing investments in the US, UK and Germany.
The debt financing business of Allianz Real Estate registered assets of EUR18.9 billion as at the end of June.
The firm’s European debt portfolio was EUR7.7 billion. In mid-June, the firm completed a prime real estate debt deal in Germany as sole lender for the refinancing of existing debt for Gropius Passagen in Berlin for EUR230 million – taking its debt fund to EUR1.5 billion in deployed capital at the time. The transaction followed further prime European deals in April totalling EUR476 million, including the financing of Southbank Central in London for EUR200 million for an affiliate of Starwood Capital Group, and the refinancing of EUR 164 million for the 22,000 sqm, prime office asset at 92 Avenue de France. Fundraising for the Luxembourg-regulated debt fund, launched in mid-2018 to satisfy the appetite for debt of smaller Allianz companies alongside external investors, was opened to third-party investors in mid-2019.
In the US, Allianz Real Estate’s debt business reached EUR11.2 billion and registered several key transactions across the office, residential and industrial sectors, with the most prominent being its co-commitment of EUR282 million alongside Barings to fund the acquisition of the 650 Townsend office building in San Francisco. The company provided further financing for the US Environmental Protection Agency’s regional headquarters in Denver and the 298-unit Maeve Apartments apartment community in Stoneham, Massachusetts.
To support its global growth aspirations, Allianz Real Estate continued to invest in its physical network. The firm opened two offices – London and Stockholm – and attracted several industry experts, including Michael Cale as Co-Head of Debt Investments and Karen Horstmann as Head of Equity Acquisitions in the US, Kari Pitkin as Head of Business Development for Europe and Shripal Shah as Head of Debt Origination in London, and Jenny Lindholm as Director Nordics in Stockholm. Key appointments within the Asia Pacific team include Chiang Wei Ng, Head of Asset Management, and Charles Kwak, Head of Transaction Services. Continuing the hiring trend, Allianz Real Estate hired a further 25 industry experts during August and September.
|Assets by class and region||AUM end-June 2019 |
|AUM end-2018 |