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.

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.