Allianz unit increases investments in China

HONG KONG: The property investment arm of Germany’s Allianz SE expects China to account for up to 50 per cent of its AsiaPacific fund allocation from 40 per cent now, with focus on the new economy and logistics sectors, a senior executive said.

The insurer and asset manager yesterday said it bought an office tower in a Beijing software park that was fully leased to Chinese tech firms.

It expects to complete another purchase in a Shanghai business park within a couple of weeks, said Rushabh Desai, Asia-Pacific chief executive at Allianz Real Estate.

“We want to be aligned to the new economy and contribute towards China’s growth in the sector, we’re investing based on that thesis,” said Desai.

New economy refers to nontraditional industries such as biopharma and online retail.

Allianz Real Estate is just one of many foreign investment firms betting on growth in the commercial property markets of China’s top-tier cities, driven by high demand from small startups to large corporates.

The firm bought 98 per cent of the Beijing office tower — dubbed ZLink and valued at US$185 million (RM740 million) to US$195 million — in an all-cash deal from private equity firm KaiLong Group and Goldman Sachs Group Inc, said Desai.

He said the firm will look for opportunities in Beijing and Shanghai office space, as well as in warehousing. Its portfolio includes co-investing in two Shanghai office towers.