Allianz Real Estate, the real estate investment and asset manager of the Allianz Group, saw its assets under management (AUM) increase to EUR73.6bn as at the end of 2019, a rise of 16% year-on-year. Equity investments increased 20% to EUR52.9bn while debt financing reached EUR20.7bn, up 8% year-on-year. Across the year, the firm introduced a range of new strategies to secure stable returns for its global investor base.
“Allianz Real Estate has delivered an exceptional year of growth and expansion, with increased penetration across asset classes, sectors and strategies. Diversification remains fundamental to our success, and this has been evidenced by our growth in Asia, the strength of our US and European debt business and our logistics portfolio, which increased 36% to EUR7.5bn in AUM,” said Francois Trausch, CEO & CIO of Allianz Real Estate.
While Europe remained its largest market overall, with total assets up 14% to EUR48.9bn, growth was particularly pronounced in the Asia-Pacific region, which rose 83% to EUR5.5bn. In the US, Allianz Real Estate closed a record number of debt deals (60), with overall US AUM up 10% to EUR18.1bn.
Over the 12-month period, Allianz Real Estate opened new offices in London, Luxembourg and Stockholm, bringing the total number of offices it has across the world to 21. The firm also continued to expand its global team with a number of senior hires in Europe, the US and Asia-Pacific.
In September 2019, the firm announced its first third-party equity transaction: an office development in Berlin on behalf of German pension fund BVK. The asset, being developed by EDGE Technologies and set for completion in 2023, will make significant use of ‘smart’ technology which places tenant well-being and sustainability at its core.
“We expect to increase our allocation to core and core plus investments as we capitalise on our momentum in 2020. Growth will very likely remain strong as our investors, including third party institutions, continue to allocate to real estate and look to the strength of Allianz Real Estate. We are particularly encouraged by the interest from the like-minded institutional investors looking to invest alongside Allianz, notably within the Asia-Pacific and our European debt fund,” said Annette Kröger, CEO for North & Central Europe, Allianz Real Estate.
In 2019, Allianz Real Estate initiated a decarbonization pathway that will focus on growing its allocation to certified green buildings, increasing use of renewable energy, energy efficient improvements and targeted engagement with tenants. The firm has also extended the initiative to its debt portfolio through the use of green loans supported by the Loan Market Association framework.
Active asset management is a key part of how the business adds value to properties on a long-term basis, particularly with regards to the latest environmental standards and innovative technologies. Over 2019, the firm’s on-the-ground asset management team was involved in a number of high-profile redevelopments, most notably Corso Italia 23 in Milan and 16 Avenue George V building Paris.
“Digitalization, innovation and sustainability are important pillars of our global strategy as they become defining industry factors in 2020 and beyond. Our focus is on the smart transformation of our buildings, both on new and existing ones, to optimize operations as well as the energy performance to generate predictive data analytics,” said Alexander Gebauer, CEO for West Europe, Allianz Real Estate. “We are currently smart-upgrading 500,000 sqm of office spaces across Europe with the aim of maximizing our portfolio value while pursuing an ambitious environmental and social agenda focused on tenant use and social well-being.”
A significant number of Allianz Real Estate’s largest deals in 2019 took place in the Asia-Pacific region, including the 100% acquisition of a EUR1.1bn portfolio of core multi-family residential assets in Japan, as well as a 60% stake in DUO Tower, a marquee commercial development in Singapore.
"2019 was a pivotal year both in terms of our AUM growth as well as organization build-out in the region. We were also able to demonstrate our ability to originate and manage direct transactions," said Rushabh Desai, CEO Asia-Pacific for Allianz Real Estate. "Our success in 2019 reinforces our conviction about the long-term growth potential of the Asia-Pacific region. Going forward, we are well poised to navigate through the different market cycles to secure attractive, long-term, risk-adjusted returns for our investors, both internal and external."
In the US, Allianz Real Estate announced another strong year of growth after deploying over USD3bn. The debt team originated 60 new transactions with a total value of USD2bn. Alongside several indirect investments with strategic partners, key equity deals included the acquisition of a 49% stake in the iconic 30 Hudson Yards in New York. The firm also expanded its US logistics footprint by USD568m.
“Our fast-growing business has attracted a number of senior hires in both New York and Atlanta, enabling us to deploy a record USD3bn over equity and debt,” said Christoph Donner, CEO of Allianz Real Estate of America. “The US now represents 26% of Allianz Real Estate’s total portfolio and continues to offer excellent opportunities based on our disciplined, long-term approach.”
European debt continued to play a central role in Allianz Real Estate’s strong performance in 2019, with assets under management rising 10% to EUR8.7bn. The strength of its European debt portfolio helped assets under management within its Luxembourg-based debt fund grow to almost EUR3bn as at the end of 2019. The fund was launched in mid-2018 to simplify access to European debt investments for Allianz group insurance companies.
“Our European debt platform has developed excellent momentum over the past 18 months, and has quickly become a mainstream vehicle for many of our group companies. More generally, we are seeing strong demand for our financing in Europe and expect this demand to continue given our disciplined underwriting and the highly competitive nature of our proposition,” said Roland Fuchs, Head of European Debt at Allianz Real Estate.
|Total AUM (EUR), 2019||Total AUM (EUR), 2018|