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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.

The fund aims to raise US$500 million in equity. Allianz will own 50 per cent of the platform, with the remaining half held by long-term institutional investors.

This marks Allianz's first real estate transaction in India and is conducted by Allianz Real Estate, the group's US$63.5 billion real estate investment and asset manager. The deal forms part of the insurer's strategy to allocate around 5 per cent of its global real estate portfolio to the Asia-Pacific region.

The platform aims to build a long-term, cash-flow producing office portfolio by buying a mix of develop-to-core, forward purchases and stabilised or stabilising assets, and targets tier-one Indian cities - Mumbai, Bangalore, Hyderabad, Pune, Chennai and the National Capital Region.

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

"In growth economies like China and India, real estate provides a scalable entry into the market for Allianz in terms of investments/asset management exposure," said Francois Trausch, global CEO of Allianz Real Estate.

Shapoor Mistry, chairman of Shapoorji Pallonji, said: "We view this partnership with Allianz as the first step in a relationship which will focus on creating long-term value for investors, and will be supported by Shapoorji Pallonji Group's substantial credentials and experience in delivering and managing real estate assets across key markets in India."

Khaitan & Co, Ernst & Young, and Macquarie Capital Securities (India) Pvt Ltd advised Allianz on the deal, while JLL, AZB, and PWC advised the Shapoorji Pallonji Group.