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Hongkou SOHO, Shanghai. Allianz website.

German insurance giant Allianz said it has entered into a co-investment agreement with Singapore's Keppel Group to buy Hongkou SOHO, an office and retail building in Shanghai's Hongkou District, for US$525 million.

Keppel Group's AAMTF III will hold a 40 percent stake and the remaining 60 percent will be equally split between Allianz and Keppel Land China, Allianz said in a statement on Wednesday.

Both Allianz and Keppel Land are investors in AAMTF III, which is managed by Alpha Investment Partners (Alpha), a unit of Keppel Capital.

Allianz Real Estate, the $53 billion real estate investment and asset manager within the Allianz Group, implemented the transaction as part of its strategy to allocate around 5 percent of its global real estate portfolio to the Asia Pacific region.

Designed by leading architect Kengo Kuma, Hongkou SOHO boasts an eye-catching structure and facade.

The architecture consists of pleats, which change their expressions gradually according to the angle, strength, and tone of sunshine.

"We are attracted to Shanghai as a leading global 24/7 city...," said Rushabh Desai, head of Allianz Real Estate Asia-Pacific.

"Co-investing with local experts is an approach our investors favour for the region and we look forward to broadening our activity in this area."