As Allianz Real Estate continues to add to its more than $8 billion in assets under management across Asia Pacific, the European financial services giant has added a pair of senior executives to its team in the region.
Just last week, the real estate investment division of Allianz welcomed former JP Morgan Asset Management executive Daisuke Noguchi as its new head of acquisitions for Japan, with this latest personnel move coming just two months after the company spent $89.5 million adding a fresh tranche of apartments to its Tokyo rental housing portfolio.
“Our APAC organisational build-out is closely aligned with the growth of our portfolio in the region,” said Rushabh Desai, chief executive for Asia Pacific at Allianz Real Estate. “We have systematically built an expert local team, starting with acquisition and asset management resources, followed by experts in transaction services and then the localisation of the enabling functions.”
The addition brings Allianz Real Estate’s headcount in the region to 34 people spread across its headquarters in Singapore, as well as in Tokyo and Shanghai offices opened last year.
Prepping for Growth
Noguchi, who had served as senior investment officer for real estate at JP Morgan Asset Management in Japan since September 2016, is expected to play an important role in Allianz’s growth agenda in Japan, according to Desai. The new hire is expected to work together with Masayuki Kato, who joined the company last summer as head of asset management for the country.
The top-level Japan hire comes as Allianz expects to reach 40 people in the region by the end of the year, taking on more teammates in Tokyo and Shanghai to add to its Singapore-based crew.
Also joining Allianz Real Estate this month is another former JP Morgan Asset Management executive, Dean Kwon, who has assumed the role of chief financial officer based in Singapore. Kwon served as GE Capital’s CFO for Southeast Asia from 2009 to 2011, when Desai was a managing director with GE Real Estate in Tokyo.
Most recently the University of Virginia graduate had spent nearly three years in Hong Kong as CFO for CLSA Capital Partners.
Desai is building up the Allianz Real Estate team in the region after the company grew its Asia Pacific portfolio by 16 percent last year, with more deals expected to be on the way in the firm’s favoured themes of rental residential, logistics and data centres.
Earlier this week, Desai announced that his firm was launching a $1 billion Japan rental housing fund, which is being set up to allow like-minded institutions to invest alongside Allianz as it works to leverage the expertise it has gained in that market to begin managing third-party capital in the sector.
As competition increases for Japanese apartment assets, Desai plans to pursue both manage-to-core and develop-to-core strategies to be able to access opportunities at attractive rates of return.
“In a well-measured way, we are looking to create that alpha by taking leasing and/or development risk,” Desai explained.
COVID Contingencies in Place
Allianz will also continue to pursue logistics deals. It has been paying close attention to the market after Blackstone’s recent $2.9 billion sale of an Australian logistics portfolio to ESR and GIC raised the potential for a reset in market expectations regarding warehouse deals Down Under.
“Typically, logistics has an arbitrage over office, and that gap was bridged in this transaction,” Desai said, with analysts indicating that the 45-asset portfolio had changed hands at a cap rate cited at various figures between 4 and 4.5 percent. “It’s possible that prime logistics assets in Australia may soon trade at sub-4 percent cap rates,” he added.
While resurgent waves of COVID-19 in India, Southeast Asia and other parts of the region have led to tightened borders and lower projections for economic growth in some Asia Pacific economies, Desai said the setback was within the range of the insurer’s planning.
“With the onset of the pandemic, we adjusted our underwriting to factor in a short- to medium-term disruption in income,” he said. “There will be a lot of opening and closing of economies, but our thesis of aligning our investments with secular megatrends is still largely in place.”