Allianz Real Estate, acting on behalf of several Allianz group companies, and VGP, a European provider of high-quality logistics and semi-industrial real estate, have agreed to form a new 50/50 joint venture. The vehicle, the fourth such venture between Allianz Real Estate and VGP since 2016, will develop a portfolio of prime logistics assets in Germany, the Czech Republic, Hungary, and Slovakia.
Allianz Real Estate and VGP are targeting to grow the joint venture to a gross asset value of EUR2.8 billion within five years by exclusively acquiring prime assets developed by VGP.
Within these countries, VGP has a pipeline of over 90 assets in around 25 strategic locations, including near capital cities such as Bratislava, Berlin, and Budapest, with a total forecast GLA of over 2.5 million sqm. The entire land bank has been already secured and a number of assets have already been delivered.
VGP is a leading developer, manager, and owner of logistics and semi-industrial real estate. The firm has a development land bank of 10.49 million sqm of own or committed land1 and currently owns and operates assets in 12 European countries. It will again act as the JV manager, asset manager, and property manager for the venture with Allianz Real Estate.
The logistics sector accounts for 13% of global Allianz Real Estate’s AUM, or EUR 10.3 billion, with the largest allocation in Europe at EUR 4.9 billion as of the end of September. 2021 has seen some of the firm’s most significant transactions, including the largest single logistics asset in terms of value in the U.S. to date. Its Italian Logistics Fund alone accounts for over EUR 400 million across 16 facilities.
The environmental profile of each facility will be a priority, aiming to encompass Carbon Risk Real Estate Monitor and EU Taxonomy compliance, the use of Sustainable Certification including high BREEAM or DGNB ratings, and EPC criteria, among others. As such, the JV will help Allianz Real Estate meet its target to reduce carbon emissions across its portfolio by 25% by 2025 and be carbon net-zero by 2050.
“We are acutely aware of the impact that e-commerce has generated in terms of the opportunities available in the market, where onshoring and inventory management on the building networks are essential. Having a dedicated logistics team working alongside prime partners such as VGP, has enabled us to remain ahead of the curve and continue to add a significant capital allocation to our global logistics portfolio, an area that represents a key strategic focus for Allianz Real Estate,” said Kari Pitkin, Head of Business Development Europe, Allianz Real Estate.
Jan Van Geet, Chief Executive Officer at VGP, said “We are delighted to be expanding our partnership with Allianz Real Estate as this new joint venture will give VGP greater optionality to refinance whilst continuing to expand the Group’s asset base and development pipeline. Having a partner who shares our commitment to sustainable and responsible building and investment practices, we are very pleased we have been able to agree to an ESG framework for this new joint venture which appreciates and is aligned with our long-term commitments. With a portfolio of prime and certified warehouses under construction and an enviable land bank, the new joint venture benefits from our significant Grade A pipeline in these four markets.”
In June last year, VGP and Allianz Real Estate announced the successful eighth and final closing of their first 50/50 joint venture, VGP European Logistics. The transaction comprised of four logistic buildings, including two buildings in a new VGP park and another two newly completed logistic buildings which were developed in parks previously transferred to the joint venture. Following this transaction, this joint venture reached its expanded investment target and is fully invested2.
1 As of 31st of October 2021
2 Barring any top-ups related to assets being completed in parks already owned by the joint venture.