'Alternative' property moves towards mainstream

AXA REIM's statement that it is increasing its investment in alternative real estate assets is the latest example of how once niche segments that offer good cash flows are becoming more mainstream. Data compiled by PropertyEU Research on European property investment in the third quarter illustrates the widening appetite for assets outside the traditional bulwark of office, retail and industrial real estate.

Indeed, Dutch pension group PGGM's acquisition of a 60% stake in UK student bed provider UPP during September involved an estimated EUR 1 bn investment, making it the largest recorded transaction in Q3. Around the same time, Singapore's GIC extended its joint venture with Unite, the largest provider of student accommodation in the UK, to create a EUR 1 bn portfolio in London.

Senior living was another source of big ticket deals in Q3. US-based HealthCare REIT announced it was acquiring five Sunrise Senior Living joint venture assets in the UK from Pramerica for EUR 191 mln. Healthcare REIT is also providing a $467 mln loan to enable Sunrise to take control of another 33 joint venture assets in the market.

Also in the UK, MedicX Fund acquired 31 primary care centres for EUR 116 mln.

The three asset types were among the alternative assets discussed on panel discussions during Expo Real earlier this month. During the fair Daniel Bowden, fund manager at AXA Real Estate in London told PropertyEU that the property arm of the insurance giant is planning to invest EUR 750 mln in alternative assets in Europe over the next three years. 'We are targeting a range of assets, including student housing and care homes and we will work with partners, such as developers, to grow our investment,' he said.