Allianz seeks to grow global real estate portfolio by EUR 15bn

Allianz Real Estate, the property arm of German insurer Allianz, intends to grow its property portfolio by up to EUR 15bn within the next five years, as part of the company's strategy of building a global asset management and insurance platform, said Olivier Piani, Allianz Real Estate's new global head.

'Germany will be the most important market for us, followed by France. At the moment, we have around EUR 18 bn of property assets under management - or around 4% of our portfolio - but we would like property to account for between 6% and 8% of our portfolio, so we would like to invest up to EUR 15 bn over the next three-to-five years,' he said during Expo Real in October.

Currently, around 80% of Allianz’s property assets, most of which are offices, are in Europe. 'We’re underinvested in North America and Asia, we'd like to change that,' Piani said.

Piani, 54, also sees an upside to the credit crunch. 'It has had a positive effect in some ways, notably that it has brought prices down. Property is not always the most transparent asset class in the world; we would like it to be more transparent,' he said.

And some markets, like London, which some investors are giving a wide berth due to uncertainties regarding the future of the occupational market, are still worth targeting, according to Piani, as long as investors take a more long-term approach. ‘If you plan to hold properties for between five and ten years it’s still worth targeting London. We are interested in core and core plus properties,’ he said.

Ultimately, he said, is it about going back to fundamentals - rental levels, supply and demand. 'Returns in the region of 25% have gone, that’s finished. Fundamentals are going to be more negative going forward.'

Allianz made the headlines in August after it agreed to sell Dresdner Bank to Commerzbank for EUR 9.8 bn, in a deal that is expected to unleash a wave of consolidation in Germany’s banking sector. The deal created Germany’s biggest bank, in terms of customer numbers, although Deutsche Bank remains larger in terms of assets, with around EUR2 trn in assets.

Piani holds a BA degree from the Ecole Superieure de Commerce de Paris and a MBA degree from Stanford University. He started his career with McKinsey before joining the Paribas group in 1982 as a financial analyst. Between 1987 and 1995, he was responsible for financial and property assets in the Paribas group. For the past six years prior to joining Allianz, he was the European chief executive of GE Real Estate.