Allianz Buys 50% Stake in Gaw-Vailog Mainland Logistics JV

Allianz has acquired a 50 percent stake in a portfolio of mainland China logistics assets according to a statement from the company last week, as the German insurer continues to expand its holdings in the country.

The deal was executed by Allianz Real Estate, the property investment and asset management division of the Munich-based firm, which purchased the stake from a joint venture between Vailog China, the local division of an Italian industrial property specialist, and a fund managed by Hong Kong’s Gaw Capital Partners, according to the statement by Allianz.

The acquisition is the latest in a flurry of deals by Allianz since it appointed former GE executive Rushabh Desai to run its Asia Pacific operation in late 2016. Following that move, Allianz has invested more than Euros 1 billion ($1.13 billion) in mainland China assets, including office, retail and now logistics properties.

Buying a Five City Portfolio

Allianz’ shed deal gives it a half stake in a portfolio of logistics assets that include distribution centres in the Chinese cities of Shanghai; Jiaxing, in Zhejiang province; Foshan, in Guangdong; Wuhan, in Hubei; and Shenyang, in Liaoning province.

“This transaction is in line with our strategy of aligning our investments to mega-trends in the Asia-Pacific region,” Rushabh Desai, CEO for Asia Pacific at Allianz Real Estate said in the statement. “Demand for logistics in China is underpinned by growth in e-commerce, middle class accession and infrastructure build-out.” Desaid added that the new portfolio, which is composed of projects completed between 2016 and 2017 and were described as core properties, complements the insurer’s existing logistics holdings on the mainland.

Together the properties have a total leasable area of approximately 375,000 square metres, according to the announcement and are leased to tenants including Vipshop, Carrefour, Miniso and Alog among others.

Gaw and Allianz Expand China Co-operation

The joint venture between the Gaw Capital fund and Vailog will retain the remaining 50 percent stake in the portfolio, although financial details of the transaction were not disclosed.

Gaw announced in June of 2015 that it would be investing together with Vailog through its Gaw Capital Real Estate Fund IV (GREF IV) to acquire, develop and manage warehouses in China, with the goal of building a platform of building a $1 billion industrial platform in the country.

Gaw Capital had previously teamed up with Allianz in China late last year when it took a 30 percent stake in a China outlet mall fund in a $550 million funding round for the ERES APAC II – China Outlets, retail vehicle. Gaw had set up the retail fund together with TH Real Estate in 2016 to expand the chain of Florentia Village luxury outlets managed by RDM Asia.

Since that time Allianz worked with Gaw again this year when Allianz backed the Hong Kong fund manager’s RMB 5 billion (then $798 million) purchase of two of the four buildings in the Sky SOHO office development in Shanghai’s Changning district in April.