Allianz RE forays into Japan’s residential market with $1.2b asset purchase

Allianz Real Estate, the real estate investment unit of German insurance major Allianz Group, is paying EUR1.1 billion ($1.20 billion) to acquire a portfolio of multi-family residential assets in Japan from Blackstone managed funds, marking the firm’s foray into the Japanese residential market.

The transaction, which is expected to complete in the fourth quarter of 2019, will help Allianz Real Estate bring in a total of 82 assets – 4,600 units offering 160,000 sq m net rentable area, according to a company statement on Friday.

Among the 82 assets, 78 are located in Japan’s four major cities, Tokyo, Osaka, Nagoya and Fukuoka. Fifty-five percent of the portfolio is located within Tokyo 23 Wards and 90% of the assets are within 10 minutes from a subway station, according to the statement.

This acquisition is in line with Allianz’s strategy of acquiring core income-producing assets for a long-term hold, said Allianz Real Estate in the statement, adding that the portfolio is stabilized with a current occupancy of 97% and all assets are on a freehold basis.

“Japan is the world’s third-largest multi-family residential market with strong urbanization trends coupled with limited net supply in the four major cities,” said Rushabh Desai, Asia Pacific CEO of Allianz Real Estate.

Allianz Real Estate, headquartered in Munich and Paris, develops and executes worldwide portfolio and investment strategies on behalf of a range of global liability-driven investors through direct as well as indirect investments and real estate loans. The company has 19 offices across West Europe, North & Central Europe, Switzerland, USA and Asia Pacific.

Residential assets have accounted for EUR9.8 billion ($10.76 billion) of Allianz Real Estate’s EUR67.1 billion ($73.69 billion) global portfolio as of the end of June 2019.