Allianz is expanding its 鈧�700m Asia-Pacific logistics portfolio with two new investments in India and China.
The German insurer鈥檚 鈧�60bn real estate investment arm has entered into a partnership with the Hong Kong-based Gaw Capital to acquire a portfolio of core modern logistics across China.
Allianz Real Estate has also committed to 50% of start-up capital of US$225m (鈧�198.3m) with the pan-Asian logistics group ESR to develop facilities across India.
The transaction cost of the Chinese logistics assets was not disclosed, but 91传媒在线 understands that the deal was done on a 鈥�5.5% to 6%鈥� yield.
The portfolio has some 375,000sqm of lettable space. In the current market in China, logistics assets are trading at US$450 to US$500 per square metre.
Speaking to 91传媒在线, Rushabh Desai, CEO Asia-Pacific at Allianz Real Estate, said the co-investment with Gaw was a stabilised portfolio and would provide 鈥渁 nice balance鈥� to its first logistics investment in China.
Desai said Allianz had currently invested in a development platform with other partners managed by Brilliant, a Chinese group. The platform has equity of US$350-US$400m.
With the investment with Gaw, Desai said Allianz was close to achieving its 鈥渋ntermediate goal鈥� of having a billion-euro exposure in Chinese assets, including logistics.
In India, Allianz has entered its second real estate investment programme. The manager鈥檚 first real estate transaction in the country was made last year when it partnered with Shapoorji Pallonji to set up an office fund.
The deals forms part of Allianz鈥檚 strategy to allocate around 50% of its Asia-Pacific real estate investment exposure to growth markets.
Desai said Allianz would take a step-by-step approach in India. The Indian market was just starting to become institutionalised, but was a market rich with potential, he told 91传媒在线.
Allianz would build up its investment in India as its logistics sector continued to develop and grow. He envisaged a time in the near future when its joint investment programme would reach the billion-dollar mark.
Desai said the tax overhaul which the Indian government brought in last year had led to the consolidation of India鈥檚 logistics sector.
The Allianz programme鈥檚 strategy was to acquire a blend of develop-to-core, forward purchases, and stabilised or stabilising assets in eight key target cities, including Mumbai, Pune, Chennai, Bangalore, and the capital, Delhi.
鈥淭his is the second time we have collaborated with ESR in the Asia-Pacific region. They have built a best-in-class team in India to take advantage of the favourable environment for logistics. The pipeline indicates a strong start to the programme.鈥�
Allianz is also an existing investor in ESR鈥檚 development programme in Japan.
Charles de Portes, co-founder and president of ESR, said: 鈥淪ince 2016, we have been focussed on bringing our integrated development and fund management platform to India to service the country鈥檚 growing demand for modern logistics facilities.
鈥淲e wanted to have a pan Asia logistics investment and we now have invested in the region鈥檚 key markets - China, India, Japan, and Australia.鈥�
Desai told 91传媒在线 that Allianz鈥檚 investment in Asia Pacific is around 5% of its global real estate portfolio, with plans to lift the allocation to the region to 10%.
