Allianz AUM hits €56bn, target €75b in three years

Allianz’s global real estate portfolio hit a new record high of €56b of AUM last year, putting it firmly on track to reach its target of €75b by the end of 2020, Annette Kröger, CEO of Allianz Real Estate North and Central Europe, told REFIRE this month.

‘Last year was a strong investment year for us and we could do a similar volume of investment this year,’ she said. ‘We did around €1b of direct investment in Germany, Austria and the Nordics last year, of which around half was in Germany. On the direct investment side, we focus on offices, but we’re prepared to take on a bit more risk with leasing or capex issues to get better returns. We’re also prepared to take development risk with a partner. We’re actually doing office developments in Cologne and Hamburg with a partner.’

New equity investments in Europe last year totalled €5.2b, split equally between direct and indirect investments. In addition to core investments like the acquisition of the prime office complex Vertigo in Luxemburg, Allianz Real Estate started to invest more heavily in forward deals, including the ‘Kap West’ prime office project in Munich.

‘Our forward deals last year were office-focused,’ Kröger said. ‘This year, we’d also like to enter deals at an early stage, either via forward deals or with partners. Globally, we’d like to invest more in logistics and student housing. The key challenge is the amount of liquidity in the market as well as how occupier demand changes over time, particularly in the retail sector. More companies are also taking up coworking space in Germany and this is another trend to watch.’

Overall, Allianz invested €8.9b in real estate globally last year, the highest annual volume in its history, driven in part by its decision to expand investment into alternative assets. Its Asia-Pacific business grew to €1.9bn with high profile transactions in India and China, following Allianz’s first foray into the Indian market last year. ‘Fast growing economies like China and India now account for more than half of our investments in the region, with the rest split between Australia, Japan, Singapore, Korea and Hong Kong,’ said Rushabh Desai, CEO of Allianz Real Estate Asia Pacific. ‘We expect to increase our allocation to Asia Pacific beyond our current 5% of the global portfolio.’

Debt portfolio reaches €16b

It was also a busy year for Allianz’s debt business.Senior financing grew by €3.7b– up by €1.8b in the US and €1.9b in Europe- thereby increasing the group’s overall debt portfolio to €16b. European debt exceeded €6.3b while the US debt portfolio reached €9.9b. Key debt investments included the prime office buildings ‘Window’ in Paris, and ‘Atrium’ in the Netherlands; 55 Baker Street, a mixed-use building in London and Miami South Beach's 1111 Lincoln Road.

‘European debt played a central role in our asset growth in 2017 with a number of landmark deals for our Pan European portfolio,’ said Roland Fuchs, Head of European real estate finance at Allianz Real Estate. ‘The development of our UK strategy has led to further diversification of our European debt portfolio, and the UK remains a market of interest for us going forward.’