Allianz Group's real estate arm will take a 35% stake in KaiLong's second Greater China commercial real estate fund, which is looking to raise US$500 million in equity.

The German insurer and asset manager's stake buy is valued at approximately US$175 million, according to an Oct. 15 Mingtiandi report.

The company said the investment is part of its strategy to allocate about 10% of its global real estate portfolio to the Asia-Pacific region.

Allianz Real Estate Asia-Pacific CEO Rushabh Desai said the company will invest about 50% to 60% of its Asia-Pacific allocation in growth economies.

KaiLong focuses on repositioning and refurbishing commercial office space and transforming undervalued real estate into contemporary office spaces.

Allianz was advised by Clifford Chance and Ernst & Young on the transaction.