Worldwide diversification over asset classes, investment styles and structures drives assets under management to EUR63.5bn as at the end of 2018 / Direct and indirect equity investments increased 10% to EUR44.2bn while commercial real estate financing reached EUR19.3bn - an increase of 19% year-on-year – and the Asia business grew to EUR3bn / European debt topped EUR7.8bn following a record year of EUR2.1bn and the launch of a Luxembourg-based fund for Allianz clients that will soon open to third-party investors
Allianz Real Estate, the real estate investment and asset manager of the Allianz Group, saw its assets under management (AUM) increase to EUR63.5bn as at the end of 2018 – a rise of 13% year-on-year from EUR56.4bn at the end of 2017. The firm successfully expanded its global presence and continued to diversify across direct and indirect equity and debt asset classes across the year.
Direct and indirect equity investments finished the year up 10% at EUR44.2bn while the debt financing business reached EUR19.3bn – EUR11.4bn in the US and EUR7.8bn in Europe – an overall increase of 19%. Its Asia business also reached a record in terms of assets at EUR3.0bn after standing at EUR1.9bn at the end of 2017.
Over the 12-month period, Allianz Real Estate expanded its footprint in markets such as China, India, London, Prague and Stockholm, and capitalised further on the momentum it has with forward purchase and value-add strategies. The year also saw the launch of a Luxembourg-regulated platform to satisfy the appetite for debt of smaller Allianz companies, part of a transformative plan to accept funds from third-party institutional investors in 2019. The firm is forecasting that third-party funds will account for 10% of its target EUR100bn in AUM by the end of 2023.
Francois Trausch, CEO of Allianz Real Estate
“2018 was another strong year of growth and expansion for Allianz Real Estate. Not only did our AUM grow to EUR63.5bn, but we secured a number of significant milestones. Most notably, our Asia Pacific business reached EUR3.0bn and our European Debt franchise launched its first Luxembourg fund to be opened up later to third party clients. Importantly, our growth has been achieved in the context of a long-term, highly disciplined and diversified model,” said Francois Trausch, CEO of Allianz Real Estate. “We have continued to make the most of our unconstrained approach and focused on selecting prime assets and working with partners that support our long-term approach to deliver outperformance across market cycles.”
Growth in equity investments
Since the beginning of 2018, new equity investments totaled EUR4.8bn, the majority in direct investments. The firm ended the year with EUR34.9bn in direct and EUR9.4bn in indirect investments overall.
Key equity investments included the acquisition of the ZLink office building in Beijing, the ATLAS complex in Munich, the Ocean Financial Center in Singapore, the Monteburgos site in Madrid (Allianz’s first value-add deal in Spain), and the Chapter Student Housing Platform in London. In terms of indirect, in October the firm announced a stake in the KaiLong Greater China Real Estate Fund II, a closed-ended vehicle targeting value-add commercial real estate opportunities in China and Hong Kong.
In the US, Allianz Real Estate deployed USD728mn in new equity transactions in 2018, including the historic Ferry Building in San Francisco, 53 State Street in Boston and the Terminal Stores in New York City.
Olivier Téran, CIO of Allianz Real Estate
“While the office sector continues to be the foundation of our equity portfolio, particularly in Europe and in the US, we have continued to successfully diversify across sectors, including student housing globally and logistics, especially in Europe and in APAC. We continue using indirect strategies where appropriate to optimize our portfolio mix for the benefit of our investors primarily through higher risk strategies”, said Olivier Téran, CIO of Allianz Real Estate.
“Thanks to our global footprint and our presence in both the private debt and equity spaces, we continue to see and capture excellent opportunities across the world for the growing number of investors who value our expertise.”
Opening up debt to third-party investors
In addition to equity growth, Allianz Real Estate saw strongly increased activity on the debt side. Since the beginning of 2018, financing grew by EUR3.7bn – up EUR1.6 bn in the US and EUR2.1bn in Europe – increasing Allianz Real Estate’s overall debt portfolio to EUR19.3bn.
European debt exceeded EUR7.8bn while its US debt portfolio amounted to EUR11.4bn. Key debt investments in 2018 included the iconic flagship Apple store on Avenue des Champs-Elysées, Paris; 80 Fenchurch in London; and, in the US, the Promenade at Downey – a 446,851sq ft open-air shopping center in Los Angeles County formerly owned by NASA and used to build components for the Saturn and Apollo space missions.
Allianz Real Estate’s Luxembourg-regulated debt investment platform, launched in July last year, has already surpassed EUR1bn in deployed capital, completing transactions in the UK, Italy, Ireland, Spain and Sweden on behalf of a range of Allianz insurance firms. It has successfully accelerated the firm’s European debt business and played a key role in the strong growth in overall debt assets the firm saw in 2018.
Roland Fuchs, Head of European Debt, Allianz Real Estate
“The launch of our European debt platform and the start of our push into third party funds has showcased the best of Allianz Real Estate and our ability to take our established, successful business model to new investors and unlock new opportunities,” said Roland Fuchs, Head of European Debt, Allianz Real Estate. “We have successfully accommodated the needs of Allianz clients with the fund and are very confident about our ability to attract third party institutional money onto the platform across 2019.”
Key figures - Allianz Real Estate, 2018
| Total AuM (EUR), 2018 | Total AuM (EUR), 2017 | |
| Total portfolio | 63.5bn | 56.4bn |
| Europe | 43.1bn | 38.7bn |
| US | 16.5bn | 14.3bn |
| Asia | 3.0bn | 1.9bn |
| Other | 1.0bn | 1.4bn |
| Financing portfolio | 19.3bn | 16.2bn |
| European Debt | 7.8bn | 6.3bn |
| US Debt | 11.4bn | 9.9bn |
| Equity by investment vehicle | 44.2bn | 40.1bn |
| Direct equity | 34.9bn | 30.9bn |
| Indirect | 9.4bn | 9.2bn |