Friday, May 20, 2022

Allianz, NPS set up APAC real estate core fund


Allianz Real Estate and Korea’s National Pension Service (NPS) have established a £1.87 billion ($2.3 billion) joint fund aimed at acquiring a portfolio of core properties in the region, according to an announcement

Two of the most active investors in Asia Pacific’s real estate sector have established a £1.87 billion ($2.3 billion) joint fund aimed at acquiring a portfolio of core properties in the region, according to an announcement today.

Europe’s Allianz Real Estate, which last year grew its Asia Pacific assets under management to £4.96 billion ($6.1 billion), has teamed up with Korea’s National Pension Service (NPS) to set up Allianz Real Estate Asia-Pacific Core I (AREAP Core I), a Singapore domiciled, closed-end venture.

With Allianz Real Estate acting as the investment manager and general partner, the pair of institutions are splitting the new vehicle 50:50, with plans to build an investment capacity of over £3.74 billion ($4.6 billion).

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, said Rushabh Desai, CEO of Allianz Real Estate for Asia Pacific. AREAP Core I will have the scale and reach to provide a high level of deal execution certainty for prime/core transactions.

As fund manager, Allianz intends to align its strategy for AREAP Core I with macro trends in the region and take advantage of property cycles in target countries and sectors to build a diversified portfolio of income-producing assets, according to a statement.

Within the region, the new vehicle will focus on Japan, Australia, Singapore, Hong Kong and China, seeking core investment opportunities across the office, logistics, multi-family and student housing sectors.

This is a significant step forward in our ambition of bringing like-minded third-party investors to invest alongside Allianz, said Allianz Real Estate CEO François Trausch. We view this as the beginning of a scalable partnership between NPS and Allianz, two highly respected long-term institutional real estate investors.

Trausch’s team reached this latest milestone after Allianz Real Estate grew its APAC portfolio by 83 percent in 2019, after first establishing a permanent presence in the region in 2016 with an office in Singapore. Just one month ago the European giant opened its second and third offices in Asia located in Shanghai and Tokyo.

Also last month, the Allianz team made its latest investment in Japan when it paid £100.51 million (€110 million) to purchase 11 newly developed rental apartment properties within Tokyo’s 23 core wards.

As Allianz develops its Asia presence, Korea’s NPS, which ranks as the third largest public pension fund globally with some £488.15 billion ($600 billion) in assets, has been rapidly expanding beyond its home country. The Korean state-run titan sees the joint effort with Allianz as a way to continue that growth.

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, said Hyo-Joon Ahn, CIO of NPS. The combined global experience and local expertise of the two institutions will provide prioritized access to attractive investment opportunities.

NPS was active in the Singapore market last year, agreeing in late June to buy a 50 percent stake in Frasers Tower, a 685,886 square foot (63,721 square metre) office project, from Frasers Property for £266.37 million ($327.4 million).

Last month the Korean institution made a major investment in the US when it joined with Houston-based developer and fund manager Hines to acquire a 49.5 stake in SL Green’s One Madison Avenue redevelopment project for an investment of at least £400.44 million ($492.2 million).


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