Allianz Real Estate is investing $600 million into real estate investment funds managed by logistics real estate developer and fund manager GLP which target investments in China and Japan, according to an announcement today by the two companies.
In its statement, Allianz Real Estate, which over the last decade has built up a portfolio of logistics assets worth 9 percent of its €63.5 billion ($71.2 billion) in total assets under management, identified warehouse projects as a key element of its investment thesis, as it continues to expand into the Asia Pacific region.
For Allianz Real Estate, which is making the commitment on behalf of several companies within the Allianz Group, the investment is the first major tie-up Asia’s largest warehouse developer, and comes just a few months after GLP, which currently manages some $35 billion in assets across China and Japan, set up a new $5.6 billion Japan fund.
Allianz Increases Asia Pacific Reach
“We continue to believe in the long term fundamentals of the Asia Pacific region,” said Desai. “Logistics is a core part of our investment strategy and this opportunity will further diversify our portfolio.” The new partners said Allianz’ investments via the funds will focus on developing and investing in logistics assets with integrated technologies in China and Japan.
In response to inquiries from Mingtiandi, Allianz representatives indicated that the $600 million in capital will be contributed in part to an existing fund, with some of the cash also going to a newly-established vehicle.
The company declined to name the entities that its capital would support, however, GLP launched its GLP Japan Development Partners III (GLP JDP III) fund in December 2018, setting a target capitalisation of $5.6 billion.
While GLP set up a $2 billion China fund in partnership with Singapore’s GIC in September last year, and in February 2018 established a $1.6 billion vehicle with insurer China Life, both of these ventures followed a single limited partner structure, according to statements at the time.
Logistics Now a Mainstream APAC Play
Since Desai joined as APAC CEO in 2016, Allianz Real Estate has grown its Asia Pacific assets under management to €3 billion ($3.4 billion), with logistics counting for a large chunk of those commitments.
Late last year, the property arm of the Munich-based insurer contributed half of the equity for an initial $225 million capitalisation of an Indian joint venture with Asian warehouse development specialist ESR. The India deal with Warburg Pincus-backed ESR followed soon after Allianz acquired a 50 percent stake in a Gaw Capital invested logistics joint venture in China that brought the insurer’s total property investments in mainland China during 2018 to more than €1 billion.
The group made its first foray into Japan’s logistics sector in 2017 with an when it invested $100 million in an ESR fund targetting projects in the country, following earlier commitments in the asset class in China and Australia.
Asia Partnership as GLP Preps IPO of US Business
“This partnership is a strong strategic fit, leveraging Allianz Real Estate’s reputation and history as an investment and asset manager for real estate and GLP’s investment expertise, operational excellence and global scale,” GLP co-founder and chief executive officer Ming Mei said in the statement.
Mei’s partnership with Allianz comes just over two weeks after GLP, which has 73 million square meters (785 million square feet) of logistics assets in its global portfolio, was revealed to have begun the process of filing for an initial public offering for its US operation, which could value the North American operation at $20 billion, as reported in Mingtiandi.
At the end of last year, GLP reported that it had leased 1.3 million square metres (13.9 million square feet) of facilities in Japan, with all of its new construction starts fully-leased before breaking ground.