PARIS: Allianz, Europe's No. 1 insurer, is scouring Chinese and US real estate as part of an overall plan to buy around 2 billion euros ($2.57 billion) in property assets this year, its head of real estate told Reuters.
The insurer wants to bring down its exposure to the weak eurozone economy and may buy around 200 to 400 million euros of property in the US and Asia this year, Olivier Piani said in an interview on Friday.
Asset sales, meanwhile, will be around 300 million euros this year.
"Our motive for looking at the US and Asia is growth," said Piani, adding that Allianz was looking at shopping malls across China and had already snapped up office space in US cities like New York and Boston alongside partner investors.
The 2 billion euro total investment plan compareS with 1.9 billion last year, Allianz said.
With interest rates at rock bottom and major central banks pumping liquidity to spur economic growth, insurers and investment funds are targeting real-estate assets to boost returns.
Allianz wants to increase its real-estate holdings by 40 percent, to 30 billion euros, by 2016. It is aiming to cut its heavy exposure to European real estate and to boost retail holdings at the expense of offices and residential space.
While rental returns on assets in Europe and the US are still around the same level at 5 percent, Piani said, the healthier outlook for employment and economic growth across the Atlantic made a big difference.
Within Europe, Piani said France's economic fundamentals looked worse than Germany's and cited a negative tax climate under the administration of French President Francois Hollande. However, he said Allianz would continue to invest in France.
"The question for us is: what are the reforms that are going to be made in France over the next three years?" said Piani. "Any increase in taxation is negative, yes, but has it reached a point where we will no longer invest in French real-estate? No."
Last month, Allianz' French rival AXA said in an interview with the Financial Times that it planned to divest a portion of its French real-estate holdings, citing France's poor economic fundamentals.
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