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Allianz and Others Looks to Expand Portfolio Possibilities

By Phil Butler | March 1, 2011

In investment news from Europe, retail property looks like the next boom territory for investors on the continent. According to a recent Jones Lang LaSalle survey, retail investment in 2010 accounted for at least 28 percent of the total commercial property sector. And, Allianz Real Estate, a unit of German insurer Allianz SE, is actually broadcasting they intend investing €11 billion more.

Allianz Treptowers Berlin

Allianz Treptowers Berlin

By all accounts, it appears the big institutional investor has renewed confidence, even a bullish confidence in this market segment. Since the economic downturn, many investment portfolios have to have been devoid of real estate chips, but not so for retail space. While office buildings still account for the lion's share of this segment, investors now seem intent on insulating themselves from vacancies and other negatives associated with the office sub-market.

Olivier Piani CEO Allianz

Olivier Piani CEO Allianz - the man driving the machine

For Allianz, their target margin is between 5 and 6 % yield, and according to their signals, it looks like offices may lose a bit of ground to retail and residential. And, REIT's are hunting for retail deals too, a slight shift in strategy from selling their stakes these last two years. Allianz, and progressive companies like them, have been the buyers of these divestments so far.

Harm Meijer, head of European property research at J.P. Morgan Chase, in a report from MarketWatch, said U.K. REITs will likely want to reverse the trend, especially those able to withstand market fluctuations. He suggested too, that some property stocks with exposure to UK retail might return as much as 18%.

Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets including part owner of Pamil Visions with wife Mihaela. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license. Phil is currently top interviewer, and journalist at Realty Biz News.
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