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 USD 500 million in equity," Allianz group said in a statement.
"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.
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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 USD 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 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 USD 250 million equity JV with IFC (subsidiary of World Bank) and Asian development Bank to develop affordable housing projects pan-India.
The group also has a USD 200 million deal with Canadian Pension Plan (CPPIB) for a 2.7 million sq ft operational IT park in Chennai.