Allianz Real Estate, the property investment arm of German insurer Allianz, is preparing to open branches in mainland China and Japan as part of its major expansion drive in Asia.

It has just hired its first executive in Tokyo, will be relocating three China specialists to Shanghai from its Asia headquarters in Singapore in the near future and intends to add a fourth to focus on acquisitions. 

Allianz now has large enough property holdings in both countries to warrant having people on the ground in each location, a spokeswoman told AsianInvestor. “It’s about the need to have a local presence manage our portfolio.” 

This is typical of Allianz Real Estate’s approach, she added. “Vienna [Austria's capital] was opened after we invested in a considerable asset there, and Stockholm [in Sweden] was the same.”

The China and Japan porfolios have both expanded considerably in the past two years, she said. For instance, last year in China Allianz RE took a 62% stake in Ronsin Technology Center, a €1 billion office complex in Beijing, and it also acquired a €1.1 billion ($1.18 billion) portfolio of multi-family residential assets in Japan from private equity giant Blackstone. It has also been expanding its allocations to logistics funds, among other assets, in Japan, said the spokeswoman.

The new branches have been planned for at least six months, but have taken longer than expected to go live given the current difficult environment amid the Covid-19 outbreak, the spokeswoman said. There are no immediate plans for other offices in Asia, she added.

Masayuki Kato

Masayuki Kato joined Allianz RE in Tokyo on May 4 as a director in the asset management team and will focus on managing the portfolio of investments in Japan. For the time being he will be the sole individual in that office.

Kato was previously a director at alternative asset manager Hudson Advisors in Japan with responsibility managing real estate fund investments. An executive at Hudson declined to comment on the departure.

The firm is keeping details of who will run the new Shanghai office close to its chest. The spokeswoman said she could not identify any individuals or give further details about it.

Allianz RE has also added another senior executive in Singapore. Eric Li joined on May 4 as the firm’s first head of Asia-Pacific research. He was previously head of Greater China research at Singapore-based real estate investor ARA Asset Management, where his last day was April 30.

Li reports to Megan Walters, global head of research, who will be relocating to London from Singapore, and to Rush Desai, Asia Pacific chief executive of Allianz RE.

RAPID RAMP-UP

These two latest hires will bring Allianz RE's Asia Pacific headcount up to 27, underlining its rapid regional growth. There were just two executives in the region in 2016.

Similarly, the firm's Asia Pacific assets under management had nearly doubled to €5.5 billion as of the end of 2019 from €3 billion the year before. It aims to increase the regional allocation from that 7.5% to as much as 10% in the long term, Desai has told AsianInvestor.

The business, which has €73.6 billion in AUM globally, currently only invests on behalf of its parent insurer, but that is set to change.

“We will be offering our capabilities to third-party investors wishing to invest alongside Allianz in the Asia Pacific region," said the spokeswoman, declining further to comment on the firm's plans.

Indeed, Allianz RE’s recently unveiled merger with Pimco, another Allianz-owned asset manager, is tipped to drive further expansion along those lines. Industry observers expect Pimco – which in March said it would assume oversight of Allianz RE – will use its distribution network and expertise to help its partner build a third-party client base.

Pimco also has direct property investments, and the two firms’ combined portfolio will exceed €100 billion in core, value-add and opportunistic real estate across Europe, the US and Asia Pacific.