Allianz Real Estate, the dedicated real estate investment manager within the Allianz Group and one of the world’s largest investors in real estate, today announces assets under management of EUR 71.5 billion as at the end of 2020. Overall, the firm’s investment teams delivered EUR 8.3 billion in transactions across the year, with its equity portfolio ending 2020 at EUR 50.1 billion and its debt exposure up to EUR 21.4 billion1.
In a year disrupted by the COVID-19 pandemic and the material impact on economies and business processes, Allianz Real Estate saw continued activity across asset classes and regions, with strong performances in particular in Asia-Pacific, its European debt portfolio, as well as the logistics and residential sectors. The firm maintained its highly disciplined, long-term investment strategy focused on prime assets and working with prime partners and stakeholders.
Highlight transactions include the first third-party commitment to its Luxembourg-based PAREC debt fund and the launch of AREAP Core I in Asia, a EUR 2 billion core fund launched in partnership with a like-minded institutional investor. In September alone, Allianz Real Estate completed its largest single-loan debt transaction as well as its largest office transaction in Europe to date.
The year was also noted for the successful integration of Allianz Real Estate and PIMCO. The partnership, completed in October, forms one the world’s largest and most diversified commercial real estate platforms, managing more than USD 100 billion in core, core-plus, value-add and opportunistic real estate assets. Among other benefits, the integration provides internal and third-party clients with a more comprehensive real estate investing and servicing solution.
“Allianz Real Estate has delivered a strong performance in 2020, with the completion of a number of landmark transactions. The resilience of our diversified, unlevered core/ buy-and-hold portfolio came to the fore. We have benefitted from strong growth in Asia and our European debt portfolio but also across the logistics and residential sectors. Our long-standing emphasis on building a highly connected global team, including having specialists on the ground in all our markets, paid off during the pandemic as they were able to work more effectively together in spite of the disruption to normal working patterns,” said François Trausch, CEO at Allianz Real Estate.
“We have entered 2021 with excellent momentum and are very well positioned for growth across equity and debt as well as the further diversification of our portfolio.”
Allianz Real Estate continued to grow its portfolio across the Asia-Pacific region in 2020, recording an increase in its assets under management to EUR 6.6 billion as at the end of the year, up from the EUR 5.5 billion recorded as at end-of 2019. Its regional portfolio is now well diversified across 40 investments in eight markets in the region, with approximately 40% of the exposure in fast-growing markets like China and India.
During the year, the firm completed several acquisitions, including the acquisition of two prime residential portfolios in Tokyo comprising 655 units; a 50% stake in a portfolio of six ALDI Distribution Centers in Australia on a triple-net long-term sale and leaseback basis; and the acquisition of a portfolio of prime student housing assets in Melbourne. In June 2020, the firm successfully raised its first third-party equity fund called AREAP CORE I, a EUR 2 billion investment platform to build a diversified core portfolio of high-quality properties in the Asia-Pacific region.
As part of its localization strategy to support the region’s growth, Allianz Real Estate opened offices in Tokyo and Shanghai in May 2020, complementing its Asia-Pacific hub in Singapore.
Allianz Real Estate also saw its European debt portfolio grow to EUR 10.2 billion in assets under management in 2020, up by around 15% year-on-year. It delivered EUR 1.9 billion in new investments, with capital deployed by its Luxembourg-based European debt fund, PAREC, increasing to more than EUR 4 billion, up by a third. Overall, the firm’s European debt portfolio is now spread across 12 countries in the region.
In May, the firm secured its first third-party client for its Luxembourg-based fund. A German pension fund co-invested with a EUR 300 million stake in a sub-fund valued in total at EUR 1.2 billion alongside Allianz. In September, it completed its largest single-loan debt transaction in Europe to date: a portfolio of five prime freehold central London offices with a loan of GBP 400 million (EUR 440 million).
In terms of acquisitions in Europe, 2020 saw Allianz Real Estate complete a number of significant transactions. In March, it expanded its office footprint in Germany with a EUR 214 million acquisition for the NM28 building in Munich’s dynamic market and in July, it acquired Eiffel Square, a prime office building located in one of Budapest’s most prestigious markets. The firm also completed its largest office transaction in September with the acquisition of two prime office buildings which form part of the landmark Citylights complex in the Paris region in an off-market transaction of c. EUR 500 million.
As the firms continues to see strong prospects in the multi-family sector across gateway cities in the world, it expanded its UK portfolio in August with a participation in Get Living, the UK’s largest Private Rental Sector platform. Later in the year, the firm further expanded its portfolio of Italian logistics facilities with an off-market acquisition of a grade A asset in Lombardy. The acquisition of the Broni Logistics Park, the fifth logistics deal in Italy in the past 24 months, increased Allianz Real Estate’s total Italian logistics portfolio to EUR 386 million in assets under management.
At the end of the year, Allianz Real Estate announced it was working with Dutch developer EDGE Technologies to refurbish and upgrade the five-story landmark Forum office building in Amsterdam. Rebranded as EDGE Stadium and set to complete before year-end 2022, the building will achieve BREEAM Excellent and WELL Core & Shell Gold certifications and target reduced total energy consumption of approximately 70%.
In the U.S. market, Allianz Real Estate deployed close to USD 2 billion in capital, across both debt and equity transactions, in 2020. The firm’s long-term investment approach, which has continued to focus on unlevered core/ buy-and-hold properties in 24/7 gateway cities, has proven very resilient, allowing the team to capture key transactions and add further prime assets to its U.S. portfolio.
The U.S. debt team originated more than 20 new transactions, amounting to a total of USD 1.1 billion. Highlights included the refinancing of an industrial portfolio in Denver, Colorado, with a USD 134 million loan to long-time partner Majestic Realty Co.; and the participation in a joint venture with Claredon Properties and a fund managed by Blackrock, for the refinancing of an office building in Boston, for a total amount of USD 150 million.
The equity team also recorded a strong year, committing USD 832 million to best-in-class properties across a range of sectors such as office, industrial, multifamily and life sciences. Deployment included the acquisition of 221 Main Street in San Francisco, a well-located class A office property. In December, the firm acquired 49% in a joint venture with Crow Holdings which will develop and own a 6.1 million square foot build-to-core portfolio of 19 prime logistics assets in the U.S.
Across 2020, Allianz Real Estate continued to develop and implement its global ESG program, including the decarbonization pathway it initiated in 2019. Its extensive program incorporates a range of sustainability factors into its investment cycle with the aim of reducing the greenhouse gas emissions of its portfolio to net zero by 2050.
The first milestone is to reduce the carbon footprint of the firm’s global portfolio by 25% in the next five years by following a structured framework underpinned by the Carbon Risk Real Estate Monitor (CRREM). It will do this by growing its allocation to certified green buildings, increasing the use of renewable energy, energy efficient improvements and targeted engagement with key stakeholders such as tenants.
|Total AUM (EUR), 2020||Total AUM (EUR), 2019||Total AUM (EUR), 2018||% growth 2019-2020||% growth 2018-2019|
1The EUR 71.5 billion in assets under management as at the end of 2020 is down slightly from the EUR 73.6 billion recorded for 2019. However, this takes into account approximately EUR 6 billion of Swiss assets and some own use assets from within the Allianz Group which were not transferred as part of the PIMCO integration. Excluding the Swiss assets and own use assets from calculation would result in a +5.5% growth between 2019 and 2020.