AXA IM Alts has raised an initial €800m from institutional investors for its latest European real estate development strategy.
The strategy will target all asset classes, but will primarily focus on the development of office and residential assets in “locations which have shown long-term liquidity and which are set to benefit from urban infrastructure investment”.
AXA IM Alts said it will pursue an opportunistic long-term capital appreciation strategy and will mainly target real estate opportunities in France, the UK and Germany, but with the flexibility to deploy capital in other European countries.
High-quality residential development, through new-build projects and the conversion of old office stock, will remain one of AXA IM Alts key conviction calls, it said.
The €157bn manager said its fifth-generation development strategy has secured the commitments from five Asian, North American and European institutions including investors into AXA IM Alts’ four generations of previous development strategies.
Ian Chappell, the head of development and value-added funds at AXA IM Alts, said: “Our fifth-generation develop-to-trade strategy is uniquely placed to benefit from an embedded development platform across a European network, built up over nearly 20 years, and matched with access to local, on-the-ground origination and asset management expertise.
“Whilst development activity slowed during 2020, a flight to safety will prolong capital targeting modern office and residential assets in prime and emerging locations with market-leading technology and ESG credentials, increasingly focused on individual health and wellbeing.
“With COVID-19 disrupting development pipelines, coupled with reduced competition and a retrenchment from the space by some of the more traditional players, we see an opportunity at all stages of the development cycle to create buildings that deliver environmental performance and long-term economic value, for both investors and users.”
Chappell said whilst the office sector has been characterised by uncertainty around future occupier need, it will remain an essential amenity for businesses to attract talent and we expect to see increased demand for central business district locations.
“We have several very promising residential and office projects in our pipeline which are advancing well, and which evidences our convictions.”
Florence Dard, the global head of client group at AXA IM Alts, said: “Our ability to continue attracting capital from a globally diverse investor base, with clients from Asia, North America and Europe, is a strong endorsement of the broader AXA IM Alts approach and reaffirms the continued attraction of the European real estate sector.”
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