Allianz investing $175m in Kailong greater China real estate fund

Global insurance giant Allianz is committing an estimated $175 million to a commercial real estate investment fund targetting opportunities in China, managed by Warburg Pincus-backed KaiLong Group. Allianz announced on Monday that it is taking a 35 percent share in the closed-ended KaiLong Greater China Real Estate Fund II, targeting value-add commercial real estate opportunities in China and Hong Kong. Shanghai-based KaiLong aims to raise a total of $500 million in equity, with the remaining 65 percent held by like-minded institutional investors. The deal, conducted by Allianz’s own real estate investment unit, forms part of the group’s strategy to allocate around 10 percent of its global real estate portfolio to the Asia Pacific region. We are looking to deploy approximately 50 to 60 percent of our Asia-Pacific allocation to growth economies. Strong secular growth, continued urbanization, the transition to a service-oriented economy and improving transparency are supporting stable real estate occupiers as well as investor demand in China,” noted Rushabh Desai, Asia Pacific CEO of Allianz Real Estate, in a statement. Shanghai-based Kailong first announced this latest Greater China fund in February of this year, following its full deployment of the $238 million KaiLong Greater China Real Estate Fund, its first US dollar vehicle targetting the territory. The new Greater China fund continues the investment strategy of its predecessor, with a focus on value-added commercial and industrial office deals, primarily in first-tier mainland cities and Hong Kong, KaiLong’s then newly appointed CEO for Hong Kong, Ivan Ho, expressed earlier this year.