Allianz teams up with South Korean pension fund for $2.3B real estate investment plan

June 29, 2020.

The real estate division of the Group is building a $2.3 billion investment platform in partnership with a South Korean pension fund to expand its real estate investment portfolio in the Asia-Pacific region, the company said Monday

The new deal is a joint venture between Allianz and the National Pension Service of Korea that will “build a diversified core portfolio of high-quality properties” in countries such as Singapore, China, Japan and Australia.

Allianz said the platform will be in the form of a new Singapore-domiciled, closed-end fund called Allianz Real Estate Asia-Pacific Core I, which will have an investment capacity of more than $4.6 billion. Allianz will act as the fund’s general partner and there will be no other investors. 

This deal is part of new and recent prioritizations of growth for Allianz Real Estate in Asia. It managed more than $6.2 billion of assets in the region in 2019, nearly double what it managed in 2018. It said a series of successful strategic investments and diversification throughout the region led to the 83% growth in just one year.

The division also recently opened offices in Shanghai and Tokyo for “long-term secular growth opportunities” in the Asia-Pacific area. In total, Allianz Real Estate manages $82.7 billion in assets worldwide.

“This is a significant step forward in our ambition of bringing like-minded third-party investors to invest alongside Allianz. We view this as the beginning of a scalable partnership between [the National Pension Service] and Allianz, two highly respected long-term institutional real estate investors,” said François Trausch, the CEO of Allianz Real Estate.

Earlier this month in the Asia-Pacific region, Allianz Real Estate acquired an Australian logistics portfolio of four Aldi distribution centers for $444.4 million. And in May, it acquired a portfolio of multi-family residential assets in Tokyo. Valued at $123.4 million, the deal includes 11 newly built assets with 275 rentable units. 

“Asia-Pacific continues to offer outsized growth prospects with individual markets operating at varied pace, offering an opportunity to build a diversified portfolio within the region. [The new fund] will have the scale and reach to provide a high level of deal execution certainty for prime/core transactions,” said Rushabh Desai, the CEO of Allianz Real Estate Asia Pacific.

“We are very excited about this strategic partnership with [the National Pension Service]. This new chapter in our growth story acts as a strong validation of our team’s capabilities in the region.”