Allianz Real Estate, the realty investment arm of German insurer Allianz, has formed a $2.3-billion strategic partnership with South Korean pension manager National Pension Service (NPS) to invest in a diversified portfolio of properties in the Asia Pacific region.
The joint venture will operate a Singapore-domiciled, closed-end fund – Allianz Real Estate Asia-Pacific Core I (AREAP Core I) – that will have an investment capacity of over $4.6 billion.
The companies will be 50:50 investors in the fund. Allianz Real Estate will serve as the investment manager and general partner of the venture, according to the announcement.
The venture will focus on Japan, Australia, Singapore, Hong Kong, and China, and seek core investment opportunities across office, logistics, multi-family, and student housing sectors.
The partnership will give NPS, the world’s third-largest pension fund, access to investment opportunities in the region, said NPS chief investment officer Hyo-Joon Ahn.
“This partnership represents an excellent opportunity to expand our exposure to quality assets in the Asia Pacific region through a co-investment with a like-minded institutional investor like Allianz,” he added.
The partnership comes as Allianz Real Estate continues to expand its portfolio in Asia, with its assets under management (AUM) in the region reaching 5.5 billion euros ($6.5 billion) as at the end of 2019, an 83 per cent rise from a year earlier.
A significant number of Allianz Real Estate’s largest deals in 2019 took place in the Asia-Pacific region, including the 100 per cent acquisition of a 1.1 billion euro ($1.3 billion) portfolio of core multi-family residential assets in Japan, as well as a 60 per cent stake in DUO Tower, a marquee commercial development in Singapore.
“Asia-Pacific continues to offer outsized growth prospects with individual markets operating at varied pace, offering an opportunity to build a diversified portfolio within the region,” according to Allianz Real Estate’s Asia Pacific CEO Rushabh Desai.
Globally, the firm’s AUM reached a record 73.6 billion euros ($84 billion) in 2019, up 16 per cent year-on-year.