Allianz, one of Europe's major investors, reported a second consecutive annual decrease in its real estate holdings, indicating challenges in the property sector. The German insurer's real estate portfolio declined by 7.7% in 2024 to 53.9 billion euros, in addition to the previous year's decrease. This contrasts with increases in the company's debt and equity holdings during the same period.
The commercial real estate market in Germany, France, and the United States has faced ongoing pressure from high office vacancies, declining property prices, interest rate hikes, and a shift towards remote work since the pandemic. Observers have been monitoring how financial institutions, funds, and property owners are adjusting the values of their investments or divesting in response to the market downturn.
Allianz disclosed these investment details in its latest earnings report, illustrating the company's overall performance. It announced a better-than-expected 15% increase in fourth-quarter net profit, driven in part by its leading property and casualty division. The company, a prominent player in Europe's financial services industry and the operator of PIMCO, also noted growth in its health and life insurance segment, another significant area of focus.
In the final quarter of 2024, Allianz's net profit attributable to shareholders reached 2.472 billion euros, up from 2.151 billion euros the previous year and surpassing the consensus forecast of 2.351 billion euros. Looking ahead to 2025, the company anticipates an operating profit ranging from 15 billion euros to 17 billion euros, compared to 16.0 billion euros in 2024.