German insurer Allianz has become a cornerstone investor with a fund, managed by the Hong Kong-based Gaw Capital Partners, in the purchase of a Shanghai office complex for RMB5.01bn (€644m).
Gaw Capital’s Gateway Real Estate Fund V and its co-investors have bought two of the four office towers in Sky Soho, located in Shanghai’s Hongqiao District.
Rushabh Desai, CEO of Allianz Real Estate Asia-Pacific, told IPE Real Assets that Allianz is both an investor in the fund, and it is also a co-investor in the assets.
He explained that when a deal is of a certain size, a fund will also take co-investors.
Combined, he said Allianz’s equity is about 23%. Allianz Real Estate has undertaken the transaction on behalf of a number of Allianz companies.
“This asset plays into our strategy of investing in office in Beijing and particularly in Shanghai,” Desai said.
“We are looking at locations which are upcoming and have the potential to grow as the Shanghai CBD expands. This location provides good connectivity to the rest of the city.”
Desai said the asset is great quality with good tenancy and has stabilised income.
Christina Gaw, managing principal and head of capital markets at Gaw Capital Partners. said: “Sky Soho will benefit from continuing demand for prime office and retail space, boosted by policy support from the (Shanghai) government.”
It is Allianz’s second investment with Gaw. The first was a 30% stake in the US$550m ERES APAC II – China Outlet Mail Fund, which owns two Florentia upmarket outlet mails.
Allianz also has a joint investment with the Singapore-based Keppel Capital in Shanghai’s Hongkou Soho, acquired in 2017 for US525m.