Redemptions lower Allianz RE debt AUM

The real estate investment group of the German insurer saw its RE debt assets under management drop from €19.3bn in 2018 to €18.9bn in H1 2019.

Allianz Real Estate, the real estate investment group of insurer Allianz, has reported a decrease in real estate debt assets under management after seeing an “extraordinary volume of redemptions” over the last six months.

The firm reported €18.9 billion in real estate debt under management in H1 2019, compared with the €19.3 billion reported at the end of 2018.

Explaining the reasons for the drop, an Allianz spokesperson told Real Estate Capital‘s sister publication PERE in an email response that the low-interest environment in the US and Europe has led to many borrowers taking the opportunity to refinance existing loans, leading to redemptions. In addition, many of the underlying assets have been traded to equity buyers, meaning the loans are being paid back.

The spokesperson added, however, that the firm is “delivering according to plan in terms of new business” and has secured a number of debt transactions in the first half of 2019.

The firm also expects real estate debt AUM to pick up in the second half of the year, since many borrowers appear to have pushed more of their business into H2 2019 because of low rates and changes in refinancing and sale strategies.

Meanwhile, the firm’s total AUM has continued to grow, driven by an increase in real estate equity investment. The German insurer’s real estate equity AUM increased by 9 percent from €44.2 billion to €48.2 billion over the last six months.

Allianz is also on track to meet its 2024 goal of having €100 billion in total real estate assets under management after reaching €67.1 billion at the end of the first half of 2019. According to the announcement made this week, total real estate AUM grew by €3.6 billion in H1 2019, up 6 percent from the €63.5 billion recorded at the end of 2018.

Within the equity portfolio, Asia demonstrated the most growth during the period with AUM in the region increasing by 20 percent to €3.6 billion from the €3 billion posted in 2018. US equity exposure increased 14 percent to €5.7 billion during the same period. Europe continues to capture the largest allocation at 78 percent of the real estate equity portfolio, reporting €37.8 billion in AUM.

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