This article is sponsored by Allianz Real Estate
What have been the key events for your firm over the past 12 months?
We continue to add new strategies to our investment approach. Globally, this covers new geographies and new sectors and sub-sectors.
This diversification is also evident within the regions for which we won the Institutional Investor of the Year awards: Asia-Pacific and North America. Alongside our core office investments in gateway cities, we have invested in logistics, increased our exposure to value-add, and broadened our footprint in, for example, student accommodation.
Key deals in the US include the stake in 30 Hudson Yards office building in New York, build-to-core logistics with LPC and build-to-core multifamily with Lennar. In Asia-Pacific, headline investments include major office deals in Singapore (DUO Towers), Beijing (Ronsin Technology Center) and India (Waverock), the huge Sakura residential portfolio in Japan, and student accommodation in Australia with Scape.
“Competition in the market is fiercer than ever”
What has the operating environment been like in that time?
In the North American market, we have a positive, long-term strategic outlook on multifamily residential and logistics. With 30 Hudson Yards, the investment offered a unique cashflow profile with high cash-on-cash and is a repeat deal with Related Companies.
Our diversification strategy with regards to Asia has enabled us to deliver strong growth. Our confidence in the fundamentals there – rapid urbanization, the rising affluence of the middle class, increasing sophistication in the real estate investment markets – underpins Allianz’s strategy to allocate 50-60 percent of its real estate investments in the region to fast-growing markets such as China and India.
What key challenges did you have to overcome?
Competition in the market is fiercer than ever as investors continue to focus on real estate as an alternative investment. On one or two of the deals, particularly the build-to-core logistics in the US, the team had to really sell the risk profile of the deal to key internal stakeholders: ie, the initial return on cost versus usual net initial yield on income-producing deals. In Asia, we have had to build the necessary infrastructure to match our ambition and the speed of our portfolio growth.
What or who is mainly responsible for your success?
Our two regional CEOs – Christoph Donner in the US and Rushabh Desai in Asia – take the headlines in the media when they deliver such tremendous deals. But, equally, they both lead outstanding teams in their regions. Furthermore, Allianz Real Estate is a truly global business; our teams of experts worldwide are complemented by a number of centralised functions operating out of locations in Germany and France.
The €1.1 billion Sakura deal in Japan, for example, with 82 residential assets distributed across four major cities, relied on some heavy lifting from our teams in Europe, particularly in Stuttgart and Munich. There are also numerous examples of colleagues relocating to Asia and the US for several months to lend their expertise to the regional teams. Real estate is and always will be a people business.