Allianz Real Estate joins $2bn ESR Japanese logistics fund

Allianz Real Estate is investing ¥11bn (€83m) in the Redwood Japan Logistics Fund II, managed by e-Shang Redwood (ESR).

The fund, which focuses on developing core logistics assets in Japan, has more than US$400m (€339m) in commitments along with US$600m of co-investment commitments.

When combined with leverage, the fund has more than US$2bn of investment capacity.

Allianz said the fund’s strategy is to develop modern institutional-grade logistics and distribution properties in tier-one locations in Japan, and to provide an exit option upon stabilisation of the assets.

Allianz Real Estate, the €53bn real estate investment arm of the German insurance group, made the investment on behalf of three Allianz companies.

The Allianz group has a strategy to allocate around 5% of its global real estate portfolio to Asia-Pacific.

“Japan is experiencing on-going modernisation of supply chains with strong demand for efficient logistics facilities,” said Rushabh Desai, CEO of Allianz Real Estate Asia. 

“This, combined with an attractive yield gap and relatively low development risks, provides compelling reasons for Allianz to consider the Japanese logistics sector as part of a balanced portfolio, together with ESR which is one of the most active logistics players in the region.”

Allianz already has significant investments in the logistics sectors in China, Australia and Europe through investments in various funds and partnerships.

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