AXA Real Estate aims to boost its debt platform to EUR 10bn within the coming 18 months and to EUR 15bn by the end of 2015, Isabelle Scemama, head of commercial real estate finance at AXA Real Estate, told PropertyEU. ‘We’re seeing our platform grow. We have now reached close to EUR 7bn of commitments and we will continue to raise capital in 2013, leveraging on our recent fund raising successes in Europe, the US and Asia.’
AXA Real Estate aims to boost its debt platform to EUR 10bn within the coming 18 months and to EUR 15bn by the end of 2015, Isabelle Scemama, head of commercial real estate finance at AXA Real Estate, told PropertyEU. ‘We’re seeing our platform grow. We have now reached close to EUR 7bn of commitments and we will continue to raise capital in 2013, leveraging on our recent fund raising successes in Europe, the US and Asia.’
The Paris-based investor has raised EUR 7 bn in commitments and injected EUR 4.7bn in property-backed debt since 2005, she added. 'The EUR 7bn we have is managed through various formats including separate accounts, as well as both comingled and dedicated vehicles. A variety of structures allows us to address the specific constraints and requirements of our investors. We expect additional commitments to come through various formats, including new compartments of our Luxembourg platform.’
Most of the investors in the debt platform - primarily insurance companies and pension funds - already have exposure to real estate, Scemama said.
‘However, they often view their investment in our platform as a way to diversify their credit allocation.’
Scemama said AXA’s debt unit would continue to focus on the three core European markets - the UK, France and Germany - but that the breakdown would depend on where the best risk-adjusted returns can be identified. ‘So far we have seen more value in the UK and France than in Germany as spreads on German loans tend to be tighter due to the competition of domestic banks.’
With regard to lending terms, Scemama said spreads over Libor or Euribor have tended to widen over the past 12 months. ‘The UK is leading the way with a range of roughly 250 to 400 basis points available for very clean senior loans. LTVs (loan to values ed.) have been, and remain, quite stable in the 50-60% ballpark. That said, we are seeing an increasing number of financing opportunities on good quality assets that carry some sort of re-letting or refurbishment risk and which offer significant additional upside.’
In this category of loans, returns of between 450-650 bps are possible, she added.
The full interview appears in the December issue of PropertyEU. Click on the link below to subscribe:
