Worldwide diversification over asset classes, investment styles and structures drives assets under management to EUR60.1bn at the end of June 2018
European financing team reaches EUR6.8bn with a focus on prime investments on a Pan European basis and launches a debt platform to satisfy the appetite of Allianz companies and external clients
The real estate portfolio of Allianz continued to grow in the first half of 2018. Allianz Real Estate, the real estate investment and asset manager of the Allianz Group, expanded its global presence and continued to diversify across direct and indirect equity and debt asset classes reaching EUR60.1bn in assets under management at the end of June 2018 (EUR56.4bn at the end of 2017). Direct and indirect equity investments stood at EUR 42.5bn while the financing business of Allianz Real Estate reached EUR17.6bn, thereof EUR10.8bn in the US and EUR6.8bn in Europe.
The last 12 months saw Allianz introduce new strategies like forward purchases in Europe (The Icon in Vienna and Kap West in Munich) and enter new markets like India, London and the Chinese Office market. The business also announced the launch of a Luxembourg regulated platform to satisfy the appetite for debt of smaller Allianz companies alongside external investors.
“We are well on track,” said Francois Trausch, CEO of Allianz Real Estate at Expo Real 2018. “We passed our 2020 target AuM of EUR60bn 18 months ahead of schedule, positioning us well for our ambitious growth plans across established and new territories and asset classes. Allianz continues to find real estate an attractive asset class and the launch of our debt fund will further support our aspiration to exceed EUR100bn over the next five years.”
Strong growth of equity investments
Since the beginning of 2017, new equity investments totalled EUR7.2bn, with EUR2.0bn in direct, EUR2.0bn in joint ventures and EUR3.2bn in indirect investments. This included the recent addition of forward purchases in Europe and the firm’s entrance into the China office market.
Examples of 2018 investments are the acquisition of ZLink in Beijing, the ATLAS office complex in Munich, the development of Monteburgos office site in Madrid, the Überseehaus – a commercial building in Hamburg, the Gangaren 11 office complex in Stockholm and the Chapter Student Housing Platform in London.
The total equity portfolio rose to EUR42.5bn: EUR25.9bn in direct, EUR6.4bn through joint ventures and EUR10.1bn in indirect investments. Indirect equity accounted for 17% of Allianz Real Estate’s portfolio allocation as at the end of June 2018. To support recent growth in Austria and the CEE, the business opened an office in Vienna in March.
“We continue to manage our growth in a selective way”, said Olivier Téran, CIO of Allianz Real Estate. “Our historic strength in the European office sector continues to be the bedrock of our portfolio, but we employ joint ventures and indirect investments to access value add and opportunistic investments across Europe, the US and Asia alongside the direct equity ownership of core properties. Our unconstrained approach allows us to invest for the long term, providing our liability driven clients stable returns across the market cycle.”
Launch of fund to meet client’s growing appetite for debt
In addition, the firm saw increased activity on the debt side. Since the beginning of 2017 financing grew by EUR5.1bn – up EUR2.5bn in the US and EUR2.6bn in Europe – increasing Allianz Real Estate’s overall debt portfolio to EUR17.6bn. European Debt exceeded EUR6.8bn while the established US debt portfolio amounted to over EUR10.8bn. Key debt investments in 2018 included UpperWest mixed-use tower in Berlin, the iconic future flagship Apple store on Avenue des Champs-Elysées, Paris, 80 Fenchurch office building in London and 200 Occidental office building in Seattle.
In September Allianz Real Estate announced the launch of a Luxembourg regulated debt investment platform. Structured to accommodate the growing demand from the Allianz Group for debt investments, the fund will be opened to third party investors in 2019. The first two transactions on the platform were the financing of St Katharine Docks in London and the refinancing of Noventa di Piave in Italy.
“Our debt platform has been developed using the highest industry standards and partners. Our initial focus is on our Allianz clients, especially the smaller companies whose investment size has made it difficult for them to participate in the individual debt deals. From there we plan to offer access to our capability to third parties, providing them with the opportunity to invest in debt alongside Allianz,” said Roland Fuchs, Head of European Debt, Allianz Real Estate.
Key Figures - Allianz Real Estate, Q2 2018
| Total AUM (EUR) June 2018 | Total AUM (EUR) Dec 2017 | |
|---|---|---|
| Total portfolio | 60.1bn | 56.4bn |
| Europe | 40.8bn | 38.7bn |
| US | 15.6bn | 14.3bn |
| Asia | 2.2bn | 1.9bn |
| Other | 1.2bn | 1.4bn |
| Financing portfolio | 17.6bn | 16.2bn |
| European Debt | 6.8bn | 6.3bn |
| US Debt | 10.8bn | 9.9bn |
| Equity by investment vehicle | 42.5bn | 40.1bn |
| Direct equity | 32.3bn | 30.9bn |
| Indirect | 10.1bn | 9.2bn |