Allianz, Shapoorji Pallonji set up fund targeting Indian office market

INSURER Allianz is partnering Indian conglomerate Shapoorji Pallonji Group to establish SPREF II, a Singapore-domiciled, Indian-rupee denominated closed-ended fund targeting the Indian office market.

Allianz will own 50 per cent of the platform, and the remaining will be held by like-minded long-term institutional investors.

The transaction, which marks the German firm's first investment into real estate in India, was conducted by Allianz Real Estate, a $63.5 billion real estate investment and asset management firm within the group.

The deal is part of Allianz's strategy to allocate about 5% of its global real estate portfolio to the Asia Pacific region.

Francois Trausch, global chief executive officer, Allianz Real Estate, said, "India is strategically important to the Allianz Group".

The platform's strategy will be to leverage structural trends in six tier-one cities to build a long-term, cash flow producing office portfolio by acquiring a blend of develop-to-core, forward purchases, and stabilized or stabilizing assets.

The fund will target six cities - Mumbai, Bengaluru, Hyderabad, Pune, Chennai and National Capital Region (Delhi). "The Indian economy has been consistently outperforming", said Rushabh Desai, Asia-Pacific chief executive officer, Allianz Real Estate. "Strong secular growth, stellar demographic trends and improving transparency are supporting stable real estate occupiers as well as investor demand".

"We view this partnership with Allianz as the first step in a relationship which will focus on creating long term value for the investors", said Shapoorji Pallonji Group Chairman Shapoor Mistry.

The fund will be supported by the Shapoorji Pallonji Investment Advisors team and led by veteran dealmaker Rajesh Agarwal.

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The development comes at a time when commercial real estate has outdone other segments of the market.

Domestic investor ASK Property Investments Advisors recently opened up its investment horizon for commercial real estate and invested in a mixed-use project of ATS.

Civil construction and real estate major Shapoorji Pallonji & Company Ltd.