This marks Allianz’s second real estate investment program in India, which was conducted by Allianz Real Estate, the US$67.5 billion (EUR 60 billion) real estate investment and asset manager within the Allianz Group, on behalf of several Allianz companies. This deal forms part of Allianz’s strategy to allocate approximately 50% of the Asia-Pacific real estate investment exposure to growth markets.
The proposed investment program will start with an immediate equity commitment of USD 225 million (EUR 200 million), to be funded on a 50:50 basis by Allianz and ESR. This would subsequently be converted into a USD 1 billion (EUR 890 million) assets under management platform. The program’s strategy is to leverage structural trends in tier one and selective tier two cities to build a long term, cash flow positive logistics portfolio by acquiring a blend of develop-to-core, forward purchases, and stabilized or stabilizing assets. The eight key target cities are Mumbai, Pune, Chennai, Bangalore, Hyderabad, Ahmedabad, Kolkata and National Capital Region (“Delhi”).
“India’s logistics sector is coming of age. The sector is benefitting from a lot of favorable trends, such as stellar consumption patterns, continued infrastructure spending, increasing transparency and the nation-wide implementation of a uniform indirect tax system”, said Rushabh Desai, Asia-Pacific CEO of Allianz Real Estate. “This is the second time we are collaborating with ESR in the Asia-Pacific region. They have built a best-in-class team in India to take advantage of the favorable environment for logistics. The pipeline indicates a strong start to the program.”
Allianz is also an existing investor in ESR’s development program in Japan.
Charles de Portes, Co-founder & President of ESR, said, “We are delighted to partner with Allianz, an existing strategic partner of ESR in other geographies. Since 2016, we have been focused on bringing our integrated development and fund management platform to India to service the country’s growing demand for modern logistics facilities. With our long-standing track record in the Asia-Pacific region, it is our goal to implement logistics best practices in India, while helping drive and innovate the future development of logistics real estate in the country.”
Allianz now has exposure to logistics investments across four countries in the Asia-Pacific region, namely China, India, Japan, and Australia.