AXA Real Estate is understood to be preparing the launch of a new pan-European speculative development fund as the prior 2012-vintage vehicle, Development Venture III, is nearly fully invested.
AXA Real Estate is understood to be preparing the launch of a new pan-European speculative development fund as the prior 2012-vintage vehicle, Development Venture III, is nearly fully invested.
The new fund, Development Venture IV, has an opportunistic strategy and focuses on the acquisition of land plots without building permits across main European cities with the aim to develop office buildings and generate higher returns.
Investors in the new vehicle are largely the same institutions as for DV III, which in 2012 raised €588 mln in equity from a broad range of investors comprising pension funds (54%), insurance companies (24%), sovereign wealth funds (14%) and funds of funds (8%) from North America (19.5%), the Middle East (17.0%) and countries in Europe (63.5%) including the UK, The Netherlands, Germany, Finland and France.
The raised funds provided €2.5bn of development capacity after leverage and reinvestment of proceeds.
DV III is currently developing the largest speculative project underway in Greater Paris, the 86,000 m2 Qu4drans project consisting of a total of four buildings in the 15th arrondissement. The first two assets of 20,000 m2 and 26,000 m2 are due to be delivered in October, with the remaining space schedule for completion in two years.
AXA Real Estate has appointed Jones Lang LaSalle and BNP Paribas Real Estate in late-2014 to market the space, which is targeted at very large occupiers. Headline rents in the area are at €580/m2/year with an incentive package of 20-25% for long term leases of 9 to 12 years.