Real Estate India

Allianz expands real estate footprint in growth markets, collaborates with Shapoorji Pallonji in India.

Allianz announced today that it has partnered with Shapoorji Pallonji Group to establish SPREF II, a Singapore-domiciled, INR denominated, a closed-ended fund targeting the office market in India.

This marks Allianz’s first real estate transaction in India and was conducted by Allianz Real Estate, the US 63.5 billion (EUR 53 billion) real estate investment and asset manager within the Allianz Group, on behalf of several Allianz companies. This deal forms part of Allianz’s strategy to allocate around five percent of its global real estate portfolio to the Asia Pacific region.

Allianz will own 50% of the platform, and the remaining will be held by like-minded long-term institutional investors. The fund is targeting to raise USD 500 million (EUR 438 million) in equity.

Francois Trausch, Global CEO of Allianz Real Estate, noted, “India is strategic to the Allianz Group. In growth economies like China and India, real estate provides a scalable entry into the market for Allianz in terms of investments/asset management exposure.”

The platform’s strategy will be to leverage structural trends in six tier one cities to build a long term, cash flow producing office portfolio by acquiring a blend of develop-to-core, forward purchases, and stabilized or stabilizing assets. The six target cities are MumbaiBangalore, Hyderabad, Pune, Chennai, and National Capital Region (“Delhi”).

Rushabh Desai, Asia-Pacific CEO of Allianz Real Estate, noted, “We are looking to deploy approximately 60 percent of our Asia-Pacific allocation to growth economies. The Indian economy has been consistently outperforming. Strong secular growth, stellar demographics trends, and improving transparency are supporting stable real estate occupiers as well as investor demand, in particular, the office sector which is ideal for long-term core investors like Allianz.”

“We have partnered with a best-in-class local operator to take advantage of this favorable environment. Shapoorji Pallonji’sdeveloper/operator model is vertically integrated to oversee all aspects of deal sourcing, design & build, construction management, project management, asset management and investment management.”

Shapoorji Pallonji Group, a privately-owned conglomerate, was founded in 1865 and is one of the most respected construction, infrastructure and real estate groups in India with a deep and successful track record.

Shapoor Mistry, Chairman of Shapoorji Pallonji Group said, “We view this partnership with Allianz as the first step in a relationship which will focus on creating long-term value for the investors and will be supported by Shapoorji Pallonji Group’s substantial credentials and experience in delivering and managing real estate assets across key markets in India.”

The venture will be supported locally by the Shapoorji Pallonji Investment Advisors team led by Rajesh Agarwal.

Khaitan & Co, Ernst & Young, and Macquarie Capital Securities (India) Pvt Ltd acted as advisors to Allianz. JLL, AZB, and PWC were advisors to Shapoorji Pallonji Group.

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