Allianz partners with Shapoorji Pallonji for $500m office fund

Allianz is to set up an Indian rupee-denominated closed-end office fund in a joint venture with an Indian group, Shapoorji Pallonji Group.

The firms hope to raise $500m (€438m) in equity.

The fund, to be known as SPREF II and domiciled in Singapore, will target India’s office market in six cities: Mumbai, Bangalore, Hyderabad, Pune, Chennai, and New Delhi.

In a statement today, Allianz said the partnership was its first real estate transaction in India.

“India is strategic to the Allianz Group,” said Francois Trausch, global CEO of Allianz Real Estate. “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.”

Allianz said the transaction formed part of its strategy to allocate around 5% of its global real estate portfolio to the Asia-Pacific region.

Allianz will own 50% of the platform, and the remaining 50% will be held by like-minded long-term institutional investors. 

The platform’s strategy will be to leverage structural trends in the six cities to build long-term cash-flow producing office portfolios by acquiring a blend of develop-to-core, forward purchases, and stabilised or stabilising assets.  

Rushabh Desai, Asia-Pacific CEO of Allianz Real Estate, said Allianz planned to deploy approximately 60% of its allocation to growth economies. 

“The Indian economy has been consistently outperforming,” said Desai.

He added that “strong secular growth, stellar demographic trends, and improving transparency are supporting stable real estate occupiers as well as investor demand”.

He pointed to the office sector in particular, which he said was ideal for long-term core investors like Allianz. 

“We have partnered with a best-in-class local operator to take advantage of this favourable environment,” he said. 

Shapoorji Pallonji’s developer/operator model is vertically integrated to oversee all aspects of deal sourcing, design and build, construction management, project management, asset management and investment management.

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 investors.”