Europe's Largest Insurer Adapts to the Downturn in the Real Estate Market. Despite the Harsh Winds, CEO Bäte Remains Cautiously Optimistic. Last Year, Allianz Reduced the Valuations of Its Real Estate Investment Portfolio by Eight Percent - or Around Five Billion Euros. This Measure Comes in Response to Falling Property Prices.

In a Friday afternoon teleconference with analysts, Allianz CEO Oliver Bäte had already announced an adjustment of valuations on this scale but did not provide further details. According to the company spokesperson, the impairments amount to approximately five billion euros on a real estate portfolio totaling 58.4 billion euros, which Allianz forecasts for the end of 2023.

Commercial Real Estate Belongs to the Asset Classes Particularly Hard Hit by Rapidly Rising Interest Rates. Investors Face Higher Borrowing Costs, Shifting Demand Conditions, and Declining Valuations. The Collapse of René Benko's Signa Group is Just One of the Most Notable Examples of the Crisis.

"We Reflect the Changes in Value," Bäte Stated in an Interview with Bloomberg Last Friday Regarding the Real Estate Market. "The Real Concern of Investors Is That Some Market Participants Are Not Sufficiently Disclosing the Depreciation. Allianz Is Consequent in This Respect."

Office properties constitute the largest sector of Allianz's €58.4 billion real estate portfolio with a share of 49 percent. Residential properties account for 16 percent of the portfolio. The commitment in the USA, where some subsectors are currently under particular pressure, is at 12 percent, which is comparatively low.

Despite Headwinds, Bäte Keeps a Close Eye on the Real Estate Market. "In the long term, we remain very optimistic about the sector," he emphasized in the interview. Allianz will continue to be an opportunistic buyer and will keep seizing suitable investment opportunities.