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Allianz makes first Singapore property move in $392 million deal

Allianz makes first Singapore property move in $392 million deal

The company is making its first foray into Singapore’s property market with the purchase of a stake in an office tower in the city’s central business district

Allianz Real Estate, the real estate investment arm of Allianz Group, will acquire a 20% stake in Ocean Financial Centre, a 43-story Grade-A office tower, from Keppel REIT for $392mn, said the company in a statement. The deal is part of Allianz’s strategy to allocate 5%-10% of its real estate investments to the Asia-Pacific region.

“This transaction is aligned with our approach of creating a quality portfolio of core assets in 24×7 cities,” stated Rushabh Desai, Asia-Pacific chief executive officer at Allianz Real Estate.

Singapore prime office rents have climbed 18% during the past six quarters amid a dearth of new space. Supply will only start to increase in 2020 with the scheduled completions of ASB Tower and Afro-Asia i-Mark. In 2021, CapitaSpring and the redevelopment of Hub Synergy Point should be complete, followed by IOI Properties’ development in Marina Bay in 2022, according to JLL.

Keppel REIT currently owns 79.9% of Ocean Financial Centre. Built in 2011 by Keppel Land, the property has a total net leasable area of 877,635 sq ft, comprising an office tower with retail outlets on the ground floor and basement level. The occupancy rate was 95.5% as of September 30.

“This strategic partnership (with Keppel REIT) will also put us in good stead as we look towards exploring future collaborations,” Desai stated.

This marks Allianz Real Estate’s third major deal in Asia in eight days. The company acquired a 50% stake in a portfolio of five modern logistics assets across China for an undisclosed sum on November 22. A day later, it announced a tie-up with Australian real estate company ESR Group to set up a $225 million investment programme targeting logistics assets across India.

Allianz Real Estate had $68.30bn of assets under management (AUM) as of the end of October 2018.

Keppel REIT is managed by Keppel REIT Management Ltd, a wholly-owned unit of asset management firm Keppel Capital Holdings Pte Ltd, which had AUM of $29bn as of end-2017.

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