Allianz Real Estate, the real estate arm of German insurance giant Allianz, is expanding into Central and Eastern Europe (CEE) through a 50:50 joint venture.

The Munich-based real estate platform bought into a portfolio of logistics properties developed by Belgian real estate group VGP in Germany, the Czech Republic, Slovakia and Hungary.

The transaction cost about €500 million, and the firms plan to acquire more assets to grow the joint venture to more than €1.5 billion. The portfolio comprises 27 completed buildings and seven that are currently under construction and scheduled to be completed in the next six months. This is Allianz's first partnership with VGP, which will continue to manage the properties. The developer plans to reinvest some of the proceeds from the portfolio sale into its pipeline.

Allianz, however, is unlikely to be alone in allocating capital to CEE. These peripheral property markets saw their proportion of investor preference rise from 6 percent in 2015 to 23 percent in 2016, according to CBRE's 2016 EMEA Investor Intentions Survey released last month.

The report said the greater attractiveness of CEE can partly be explained by investors' continuing 'search for yield'.

In the second half of 2015, prime yields in Western Europe fell dramatically, which caused the yield gap between CEE and Western Europe to widen markedly, raising CEE's attractiveness to real estate investors, according to the report.

Further highlighting the trend are the Church Pension Group and Deutsche Finance Group. The New York-based pension fund and the German investment manager both backed Revetas Capital, a specialist real estate investor focused on central European economies, for the first time. Revetas held a €120 million first close for the fund in March.