AMB, Allianz Form $648M JV to Acquire Logistics Properties

AMB will make an initial joint venture equity commitment of 15 percent, or approximately $97 million, and Allianz will contribute the remaining $551 million.

March 3, 2011
By Barbra Murray, Contributing Editor

Olivier Piani

AMB Property Corp. has just established a joint venture with Allianz Real Estate to purchase and operate global trade-related logistics properties in the Eurozone’s leading seaport, airport and distribution markets. The joint venture’s initial equity commitment totals $648 million.

The partners’ geographical focus will provide a large area for perusing opportunities. The Eurozone is comprised of the 17 European Union member states using the euro as the national currency: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.

AMB will make an initial joint venture equity commitment of 15 percent, or approximately $97 million, and Allianz will contribute the remaining $551 million. “This is a critical step in our commitment to developing private capital ventures with leading global investors,” Hamid R. Moghadam, chairman and CEO of AMB, noted. “With this new venture we will seek opportunities to deploy capital across the Eurozone in markets that are vital to the global supply chain.” Presently, AMB has a European portfolio that encompasses over 15.4 million square feet, including development properties.

For Allianz, the partnership allows the company to join forces with a firm that has the expertise it needs in order to further its strategy of investing indirectly in parts of the world where, Allianz CEO Olivier Piani, said, “we do not have adequate expertise on our own.”

The logistics market in Europe is on the road to recovery, a slow recovery. “Over the past 12 months occupier activity in the European logistics sector has begun to show signs of improvement,” global real estate adviser DTZ reports in a forecast of the market to 2014. “Nonetheless, growth in occupancy costs is expected to be subdued over the forecast period as the European economy gradually recovers. Europe as a whole is forecast to experience average growth of 1.6% per year over the period to 2014, reflecting weak growth from now until end 2011, and steady growth from 2012.”