Image: dpa
The listed Allianz reduced the valuations of real estate in its investment portfolio by eight percent or around five billion euros last year.
In a conference call with analysts about the business figures, CEO Oliver Bäte recently indicated an adjustment of the valuations of this magnitude, but without going into further detail. Given a real estate portfolio of 58.4 billion euros that Allianz reports for the end of 2023, this results in an absolute value of around five billion euros in devaluations. A spokesperson for the company confirmed this.
Which makes investors hesitate
Commercial real estate is one of the asset classes that is particularly hard hit by the rapid rise in interest rates. Investors are struggling with higher borrowing costs, changing demand and falling valuations. The collapse of Rene Benko’s Signa Group is one of the most famous examples of the crisis.
“We reflect the changes in value,” said Bäte in an interview with the Bloomberg news agency about real estate. “The real concern of investors is that there are market participants with impairments who do not report them. Allianz is very consistent.”
The largest sectors in Allianz’s €58.4 billion real estate portfolio are offices with a share of 49 percent and residential properties with 16 percent. The risk in the USA, where some submarkets are particularly under pressure, is relatively low at twelve percent.
Despite the headwinds in the real estate market, Bäte is confident. “In the long term, we remain very optimistic about the sector.” Allianz remains an opportunistic buyer.
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