AXA sees more growth in loan origination in 2013

AXA Real Estate is gearing up for a fresh round of lending in 2013 after successfully tapping the market for its debt platform in the past 12 months. The Paris-based investment manager has over EUR 2 bn to spend in the coming year after raising a total of EUR 7 bn in commitments.

While secondary transactions accounted for around 60% of total lending in 2011 and 2012, a shift may become visible in the next 12 months, Isabelle Scemama, head of commercial real estate finance at AXA Real Estate, told PropertyEU. ‘We will continue to invest in secondary transactions as this remains an important market for us. However, we do anticipate that the share of deals undertaken on the primary market will increase going forward. Our strategy is still to do both direct business with borrowers as well as partnering with banks as part of loan syndications.’

In terms of the capital structure, the focus so far has been on whole loans as opposed to subordinated pieces, Scemama said. ‘This has allowed us to capture the meaningful liquidity premium associated with the bottom end of the capital stack and get full control of the recovery process in case of default. We will continue to remain agile in our investment strategy, in order to capture the best relative value.’

AXA Real Estate’s debt unit focus on the three core European markets - the UK, France and Germany - but so far the former two markets have offered greater value than Germany where there is stiff competition from domestic banks. At 42%, offices accounted for the majority of transactions undertaken so far in 2012, followed by retail (20%), residential (14%), hotels( 5%), logistics (3%) and various other sectors (17%).

The average loan term has been 4.85 years, Scemama said.

The full interview appears in the December issue of PropertyEU. Click on the link below to subscribe: