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Shapoorji Pallonji, Allianz tie up for $500 million realty fund
Construction major Shapoorji Pallonji group and Germany-based Allianz group have tied-up for a $500 million equity fund to buy office assets in India. Allianz, one of the world's leading insurers and asset managers, today said it has “partnered with Shapoorji Pallonji Group to establish SPREF II, a Singapore-domiciled, rupee denominated, closed-ended fund targeting the office market in India.”
This marks Allianz's first real estate transaction in India. Allianz will own 50 per cent of this platform, and the remaining will be held by long-term institutional investors. “The fund is targeting to raise $500 million in equity,” Allianz group said in a statement. Francois Trausch, Global CEO of Allianz Real Estate, said India is strategic to the Allianz Group.
“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,” he said. The platform's strategy would be to acquire or develop office properties in six cities -- Mumbai, Bangalore, Hyderabad, Pune, Chennai, and National Capital Region.
With help of this equity fund, the JV has the potential to buy out or develop close to $1.5 billion (assuming debt-equity of 2:1) worth of commercial projects across India. Shapoorji Pallonji Group Chairman Shapoor Mistry said: “We view this partnership with Allianz as the first step in a relationship which will focus on creating long term value for the investors.’’
The platform will be supported by the group’s substantial credentials and experience in delivering and managing real estate assets across key markets in India, he added. The venture will be supported locally by the Shapoorji Pallonji Investment Advisors team led by Rajesh Agarwal. Shapoorji Pallonji Group is a diversified business house, with clients in over 50 countries, delivering complex and challenging projects for over 150 years. It operates in 6 major business areas namely engineering & construction, infrastructure, energy, real estate, water and financial services, with 16 group companies and a strong employee base of over 60,000 people.
The group has $250 million equity JV with IFC (subsidiary of World Bank) and Asian development Bank to develop affordable housing projects pan-India. Currently, three projects are at various stages of development. This should build more than 15,000 units of affordable housing pan India. The group also has a $200 million deal with Canadian Pension Plan (CPPIB) for a 2.7 million sq ft operational IT park in Chennai.
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