Allianz suspends its investments in the Irish residential real estate market

German insurance giant Allianz has decided to halt possible investments in the Irish residential property market due to the potential reputational risk to its insurance business here, The Irish Times has learned.

It is understood that Allianz Real Estate, which manages a global real estate portfolio of 79 billion euros for the insurer, had quietly appraised a number of residential real estate investments here which would have given it a significant position as an institutional lessor. in the private rental sector. (PRS).

However, Allianz’s Irish insurance arm lobbied against the move on the basis of the potential reputational risk of negative public comments about large institutions owning and renting properties here amid a housing crisis. and are considered a so-called cuckoo or vulture fund.

Allianz is one of the largest general insurers in the country, with more than 700,000 customers, according to its website.

Allianz’s decision has been communicated to real estate players here as the German company ceases to commit to potential investments.

The decision does not affect Allianz’s many existing investments in the Irish market, including its 50 per cent stake in Dundrum town center.

In a statement, a spokesperson for Allianz Real Estate said: “Allianz has already made a number of real estate investments in Ireland, with transactions being carried out, executed and managed by Allianz Real Estate.

“Allianz remains open to further real estate investment opportunities in Ireland across different sectors, including residential, with Allianz Real Estate selectively reviewing opportunities on behalf of the group. The selection takes into account the contributions of many parties, including … the local insurance entity. “

Allianz’s move comes amid increased government intervention in the property market with stamp duty measures and new rent caps in the works.

According to Cushman & Wakefield, € 1.5 billion was invested by institutions in 34 PRS transactions in the first nine months of this year. These transactions relate to 700 existing housing units and 2,500 to be built.

Local and international investors have been drawn to the Irish rental sector due to the strong yields offered. According to second quarter figures from the Residential Tenancies Board, average rents here have increased 7% per year nationally to € 1,352 and 4.4% year-on-year in Dublin to € 1,848.

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Penny D. Jackson