Minimising real estate risk

Guiding Allianz to its new Benelux headquarters

The challenge

In 2012, the decision was made to integrate Allianz Belgium, Luxembourg and the Netherlands into one entity to be known as Allianz Benelux, which would also bring together all Allianz affiliates located in Belgium. This was the ideal moment to look in to the idea of a new – now Allianz Benelux – headquarters.

While individual businesses would serve their own markets, there would be a number of shared services hosted at the HQ in Brussels, making easy access to the site paramount. It was also the ideal moment to create a brand new building, well located and attractive for employees.

Two men discussing at table with notes on table

Minimising the risk…

The Allianz Benelux Board opted for an approach that would minimise the risk as much as possible, while still finding the optimal solution. That first meant finding an external advisor that could help devise a strategy, prepare the approach, compare candidates and support the selection process.

…with an ideal advisor

PwC had already proven our advisory services by supporting Allianz with due diligence activities on its real estate portfolio over a number of years. In addition, we’d identified the fiscal and tax implications of a number of projects, demonstrating our deep tax and legal expertise, which together made PwC the ideal advisor.

Men from Allianz talking with hands and miniature flags in front

Valuing the options

Based on our reputation for accurately appraising properties, Allianz asked for valuations for the current premises in three circumstances:

  • “As is” and with no move by Allianz in Belgium

  • Refurbishment of the building with Allianz in Belgium moving out while work is undertaken and back in once completed

  • Sell the building and relocate

After having valued the three options and contacted owners of adjacent sites willing to let offices to Allianz for a period covering a possible refurbishment of the existing headquarters, Allianz eventually opted for the third scenario.

Together with Alllianz, we created an inventory of availabilities for new sites available on the market and identified the main players with the necessary technical and financial capacity – to make the project as risk free as possible - that Allianz should approach to propose solutions for selling the existing property and providing a new site for the headquarters.

Allianz was careful to keep the two parts of the transaction entirely separate with no link made between a candidate’s willingness to take over the existing building and their solution to provide a new property. Although working with one party would clearly make the transactions simpler.

Making the right choices

From a list of eight dossiers, six candidates were invited to propose solutions to buy the current HQ and surrounding buildings and/or rent or sell a new real-estate solution to Allianz Benelux. PwC assisted in drafting a list of questions to allow for a true comparison of the solutions on offer.

Results would then be presented to the Board. With no portfolio of our own to buy or sell, PwC maybe could, unlike any broker in the market, take an entirely neutral position. We reported all numbers concerned with the offers in this way. As a result, we were asked to help present the findings to the Board.

Listening to client needs

A decision also had to be made as to whether to buy or lease their new premises.  Allianz opted to buy. It was better for the firm’s bottom line and would have a positive impact on key business drivers. The insurance company also felt that it was important to continue to broaden its real estate portfolio. It also meant that the company would own a site more valuable than the one it currently possesses.

Having whittled the list of candidates to three, Allianz asked them to present their best – and final – offer (BAFO). Although Allianz was careful to stress that there was no link between a candidate’s solution for a new headquarters building and the acquisition of the existing site, Allianz opted to work with the same party for both, based on PwC’s and Allianz’s outcomes.

Protecting information for a fair deal

The move would also have to involve the labour unions as it represented a significant upheaval for staff. PwC’s high level of confidentiality, even internally, which meant no information leaked to staff, the unions or indeed any third party during the process, was highly appreciated by Allianz and enabled the transaction to progress smoothly.

The neutral position taken by PwC and the integrity everyone involved in the project showed helped legitimise the process and project internally. It gave our board confidence that not only had we selected an advisor we could trust, but one that was looking to make sure we benefited from the most optimal solution for our business, in its current form and going forward.

Philippe Jonckheere, Head of Real Estate, Allianz Benelux SA
Model of Allianz Benelux’s new, state-of-the-art headquarters

The result 

Allianz Benelux’s new, state-of-the-art headquarters – due to be completed at the end of 2019 - will be situated next to Brussels’ Gare du Nord station, offering the much-needed easy access by public transport. The company’s move to the new location will imply the sale of its current site at the price agreed at the time of the transaction.

The ultra-modern building will feature the latest technologies to support employees’ work, and attract much-needed new hires. Allianz is taking the opportunity to introduce a new activity-based way of working which is aimed at not only encouraging greater cooperation, but will help increase efficiency and make optimal use of office space.

Allianz had the opportunity to see the concept working at PwC Luxembourg’s offices. The company will also make great efficiency savings as the building will be highly sustainable and have high level BREEAM (Building Research Establishment Environmental Assessment Method) certification.

The stunning 18-story glass construction will be a notable feature on the landscape offering significant brand visibility for Allianz, which is ideally timed with its increasing focus on being top of mind for insurance with end customers.

Contact us

Ann Smolders
Partner, PwC Belgium
Tel: +32 2710 4173
Email

Jean-Paul Ducarme
Director
Tel: +32 (0)2 710 7514
Email

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