KaiLong’s second greater China commercial real estate fund, which plans to raise $500m (€431.5m), has received $175m from Allianz Real Estate.

Allianz said it will take a 35% share in KaiLong Greater China Real Estate Fund II (KGCREFII), a closed-ended fund targeting value-add commercial real estate opportunities in China and Hong Kong. The remaining interest in the KGCREFII fund will be held by like-minded long-term institutional investors, Allianz said.

The €60bn real estate investment and asset manager within the Allianz Group said the latest deal forms part of its strategy to allocate around 10% of its global real estate portfolio to the Asia Pacific region.

Rushabh Desai, the Asia-Pacific CEO of Allianz Real Estate, said: “We are looking to deploy approximately 50-60% of our Asia-Pacific allocation to growth economies.

“Strong secular growth, continued urbanization, the transition to a service-oriented economy, and improving transparency are supporting stable real estate occupiers as well as investor demand in China.”

Real estate asset manager KaiLong was founded in 2004. KaiLong launched its maiden US dollar fund with a final close of $238m in May 2015.

Hei Ming Cheng, the chairman and CEO of KaiLong Group, said, “We view this partnership with Allianz as the first step in a relationship which will focus on creating long-term value for investors and will be supported by KaiLong’s substantial credentials and experience in delivering and managing real estate assets across the Greater China market.”