Insurer and asset manager Allianz has entered into a co-investment agreement with Keppel Group to buy a 100 per cent stake in Hongkou Soho, an office and retail building in Shanghai's Hongkou District, for US$525 million (S$716 million).
Keppel's Alpha Asia Macro Trends Fund III (AAMTF III) will hold a 40 per cent stake and the remaining 60 per cent will be equally split between Allianz and Keppel Land China.
Allianz and Keppel Land are investors in AAMTF III, which is managed by Alpha Investment Partners, a wholly owned subsidiary of Keppel Capital. Allianz Real Estate undertook this transaction on behalf of a number of Allianz companies.
"We are attracted to Shanghai as a leading, global 24/7 city," said Mr Rushabh Desai, the head of Allianz Real Estate Asia-Pacific.
"This stems from our confidence in the growth prospects of the commercial real estate markets in this gateway city as well as the potential for assets like Hongkou Soho to take advantage of the future expansion of central business districts Puxi and Pudong. Co-investing with local experts is an approach our investors favour for the region and we look forward to broadening our activity in this area."
Hongkou Soho is a stabilised premium office and retail mixed-use development. It offers a total leasable area of 70,042 sq m, comprising 65,304 sq m office and 4,738 sq m retail space.
"We are happy to collaborate with like-minded partners such as Allianz who share our vision to capture opportunities in key growth cities like Shanghai," said Ms Christina Tan, the chief executive of Keppel Capital and managing director of Alpha.
"This strategic partnership is enhanced by both Allianz and Alpha employing a disciplined investment approach, which is critical for achieving the best risk-adjusted returns for our investors."
Co-investment with partners like Allianz is key to Keppel Capital's strategy, she added.
"It expands our capital platform, provides evidence of our investors' confidence in our strong investment track record and supports our commitment to grow our assets under management."