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German insurance group Allianz is betting on Italy again after having been virtually absent from the property investment market for the last 12 months.

Allianz Real Estate, which owns a €1.8 bn portfolio in Italy, has hired Mauro Montagner as new chief executive officer Southern Europe to lead its return to the acquisition trail.

‘We want to regain our leading role in the Italian property market,’ Montagner told PropertyEU in an exclusive interview.

Allianz Real Estate has long been active in Italy and in 2010 it inked the largest single-asset deal in the country since the onset of the financial crisis with the purchase of Porta di Roma - Italy's most visited mall - for €440 mln. The purchase was carried out in a joint venture with Dutch listed retail property specialist Corio.

‘We’ve already earmarked €500 mln that can be invested in Italy in a relatively short period of time. This figure can be doubled to €1 bn should we find the right investment opportunities,’ Montagner added.

Montagner, who joined Allianz Real Estate's Milan office in January from Morgan Stanley Real Estate Investing, will be looking to expand the company's investment activities in Italy while screening the market for direct, indirect and debt investments.

FOCUS ON RETAIL

In terms of sectors, the investment focus will be on retail, Montagner said. ‘We would like to rebalance the portfolio under management which is currently skewed towards offices. We will mainly be looking at large shopping centres and high-street retail. In addition to this, and contrary to the past, we will be considering acquisitions of modern retail parks with a good track record.’

The ongoing re-pricing in the property sector, combined with the high number of assets coming onto the market is expected to provide interesting acquisition opportunities in the next months, Montagner said. ‘Italy’s investment market will see more activity this year because a re-pricing is finally happening and many foreign investors are coming back. Financing is still a challenge in Italy but no longer a ‘‘mission impossible’’. There is evidence that the market is coming back to life, despite the country’s poor macroeconomic performance.’

Foreign investors recently turning to Italy include the pan-European Next Estate Income Fund, a fund advised by BNP Paribas Real Estate, which said this year will focus on investments in Italy and Northern Europe.

Allianz Real Estate is currently developing an acquisition pipeline and is already in exclusivity on one asset. ‘We should be able to close some of these acquisitions during the year,’ Montagner said.

In addition to real estate, Montagner said the group might also make its first move into the Italian debt space. 'Real estate loans are definitely part of our strategy,’ he said. ‘We are already looking at some opportunities, and I believe the first transaction will take place during the year.’

Allianz Real Estate is already active in debt financings in Germany and France. In January, the company granted a €200 mln mortgage financing loan to French real estate investment trust Icade for its Parc du Pont de Flandre business park.