Allianz launches €500m logistics JV with VGP, targets over €1.5b of assets

German investor Allianz Real Estate is joining forces with logistics developer VGP to build up a portfolio of Central European assets with a value of over €1.5 bn.

In an initial phase, the 50-50 partnership will be seeded with over €500 mln of VGP assets in Germany, Czech Republic, Slovakia and Hungary. The acquisition was made at current market values, the partners said.

The joint venture partners said, however, that the aim is to grow the portfolio 'exponentially' to over €1.5 bn in the future, by exclusively acquiring income generating assets developed by VGP in the four countries.

As part of the deal, VGP will continue to service the joint venture as asset, property and development manager.

'With Allianz Real Estate, VGP attracts a long-term investor who thinks real estate throughout the economic cycles and who has the necessary financial resources to co-invest in the expansion of the logistic and semi-industrial real estate portfolio,' VGP said in a statement.

The transaction also allows the group to concentrate on its core development activities aimed at optimising shareholder value, without having to tap the capital markets, it added.

At year-end 2015, VGP had 14 new buildings under construction, representing 272,000 m2 of lettable area. They include assets in VGP Park Hamburg, VGP Park Rodgau, VGP Park Bobenheim-Roxheim and VGP Park Frankenthal, all in Germany; as well as three buildings in the Czech parks of VGP Park Tuchomerice, VGP Park Brno and VGP Park Plzen.

VGP's investment portfolio currently consists of 34 completed buildings representing 548,838 m2 of lettable area with an occupancy rate of 97.3%. The portfolio saw its value increase by €104 mln in the year to 31 December 2015.

Value-add strategy
Allianz Real Estate announced last year that it had appointed Hugues Braconnier to the newly created position of head of logistics in a move aimed at expanding the company’s position in the sector.

A French national, Braconnier previously held several senior positions at real estate investment companies like AXA, ING and JLL where he was responsible for implementing their logistics strategies and expanding their portfolios.

The group also made an initial €120 mln indirect investment in logistics through AEW Europe, the second such investment by Allianz following the deployment in the past of €500 mln in a Prologis fund.