EUROPE - AXA Investment Managers' German branch has launched a residential fund for institutional investors following their increased appetite for the sector.
The Fund, named AXA Immoresidential, is hoping to raise €1.8bn from pension funds, insurance companies and banks over the coming years, and assets will then be invested in all types of modern and energy-efficient residential properties, including student accommodation, family dwellings and high-value apartments, and may also be considered for development and redevelopment projects.
Ulf-Harald Koepke, fund manager of AXA Immoresidential, said: "It is particularly within an environment of volatile markets that insurance companies, pension funds and banks all seek residential real estate, as it is a stabilising factor for portfolio allocation. Residential portfolios are characterised by lower levels of volatility."
To begin with, AXA Investment Managers Deutschland GmbH plans to invest between 80-90% of the fund's portfolio in German towns, universities and high-tech locations with strong economic growth and good infrastructure. The remaining 10-12% will later be invested elsewhere in eurozone countries.
The fund has already secured two project developments made up of 91 residential units in the Munich suburbs of Sendling and Giesing for around €24m, and has further deals planned in Düsseldorf, Cologne, Frankfurt and Munich.
AXA Real Estate Investment Managers (AXA REIM), the wholly-owned subsidiary of AXA Investment Managers Group, will support the management of AXA Immoresidential, which targets a distribution yield of 4.25% and an overall performance of at least 5%.
AXA Immoresidential is the second fund AXA Investment Managers Deutschland GmbH has launched for institutional investors, following the AXA Immosolutions fund specialising in commercial real estate.
AXA Investment Managers has €485bn in assets under management in December 2008.
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