AXA Real Estate Investment Managers has completed the €11.2 mln acquisition of three forest estates in Finland, covering 3,700 hectares in total, from UPM.
AXA Real Estate Investment Managers has completed the €11.2 mln acquisition of three forest estates in Finland, covering 3,700 hectares in total, from UPM.
The transaction, which was undertaken on behalf of AXA Insurance Company, is the group's first forest acquisition outside France and marks the beginning of its strategy to diversify its portfolio in geographies where forestry-related industries account for a significant proportion of GDP.
The acquisition brings AXA Real Estate’s total forestry assets under management to €100 mln, comprising over 17,600 hectares in total. UPM will continue to provide forest management and timber harvesting services to ensure the sustainable management of these forests.
As a carbon neutral investment class, the acquisition strengthens AXA Real Estate’s attempt to diversify its investment portfolio while generating a sustainable income.
The company plans to increase its forestry portfolio and will target investments primarily in Western Europe and the Nordics. The global timber market has an estimated worth of €600 bn per annum. Currently, 1.2 billion hectares of forest are managed globally for the production of timber and non-wood forest products.
'Investor appetite for alternative asset classes has seen a marked increase in recent years while demand remains for strong and sustainable returns,' said Christophe Lebrun, head of forest investment at AXA Real Estate. 'As a sector, forestry is underpinned by robust economic fundamentals and,by being one of the first movers in to this sector within Europe, AXA Real Estate is in a prime position to capitalise on the strong market sentiment and attractive returns.'
