The European asset manager is exploring growth in sectors beyond its traditional strongholds of healthcare real estate and social infrastructure, says chairman Laurent Fléchet.
Praemia REIM, formerly known as Primonial REIM, is sharpening its focus as it enters a new phase in the real estate market. As a European leader in healthcare real estate - the cornerstone of its strategy - the firm is doubling down on social infrastructure while seeking new opportunities.
As the market shifts, Praemia REIM is exploring growth areas beyond its traditional strongholds, including potential expansion into the UK and Central Europe, and diversifying into emerging asset classes such as real estate debt focused on green infrastructure.
Chairman Laurent Fléchet highlights the importance of adapting to these evolving dynamics: ‘We are evaluating the potential to broaden our investment scope, which could include real estate debt and new markets like the UK. As we prepare for this next cycle, our strategic roadmap for the coming decade aims to ensure we remain well-positioned for future growth.’
On the brink of a new cycle, the company’s approach reflects its commitment to staying ahead of market trends by balancing its core strengths with a forward-looking investment strategy.
Adapting to market shifts
Fléchet predicts a shift in how value will be created in the coming years. ‘The old cycle, which closed in 2022, was marked by yield compression, with asset management playing a key role in value creation. However, we anticipate that over the next 5 to 10 years, yields may stabilise, and value will increasingly depend on well-priced acquisitions and the ability to fully leverage rental indexation,’ he suggests.
He also notes that not all tenants may be able to sustain annual rent indexation of 2.5-3%. ‘Sectors driven by strong demographic trends are likely to outperform. For us, reaching a critical size is key - it allows us to negotiate with tenants from a stronger position, which is why we favour portfolios with multiple properties leased to key tenants rather than single assets.’
New game, new name
With roughly €38 bn of real assets, Praemia REIM is one of the largest European asset managers exclusively focused on real estate assets and the European leader in healthcare real estate with over €18 bn assets under management.
Previously part of Primonial Group, the platform was one of the first investment management companies, over a decade ago, to start distancing itself from more traditional real estate asset classes such as retail and offices and to begin focusing on healthcare real estate. Explains Fléchet: ‘We realised there were two types of real estate assets, the ones totally connected to the economy like retail and offices and the ones connected to demographics like residential, student housing and healthcare. We decided years ago to start focusing on assets linked to demographics and only invest opportunistically in the ones connected to the economy.’
Earlier this year, Praemia REIM marked a new chapter by parting ways with the Primonial Group’s distribution branch, Primonial Engineering and Development. This division was acquired by the Crystal Group, along with the Primonial brand.
As a result, Primonial REIM needed to be renamed Praemia REIM, and has become a unique pan-European platform, an independent group specializing in real estate asset management.
This strategic move aligns with the company’s vision of becoming a dedicated real estate pure player. ‘Our new name, Praemia, underscores this shift. Internally, we had often referred to the company as “PREIM”, and Praemia felt like a natural evolution, providing continuity while marking the beginning of this exciting new chapter,’ says Fléchet.
Broadening horizons in healthcare and student housing
Healthcare real estate continues to play a vital role in Praemia REIM’s portfolio, with plans to expand into new segments like medical office buildings. These assets, particularly promising in France, are seen as a way to improve efficiency in healthcare systems by shifting care from inpatient hospital settings to outpatient facilities.
‘We believe medical office buildings will gain traction across various markets,’ says Fléchet, adding that their cost-saving potential makes them a valuable addition to healthcare infrastructure in Europe.
In addition, the company is gearing up to make its mark in the student housing sector. ‘We’re excited about opportunities in this space and will soon unveil some significant investments in student housing in Italy,’ Fléchet hints.
For the more traditional offices, Fléchet expects market conditions will continue to be challenging for the next three years at best. ‘Our conviction is that the sector will largely continue to struggle. Why? Mostly because there has been a strong production of new buildings in the past and the offer is too big if we are looking at today’s demand. The repurposing of office buildings is quite complex and not always possible in our view. On the other hand, for all assets that are linked to demographics, we believe that the market has now nearly reached the bottom and institutional investors are re-starting to have a look. This type of assets will continue to be our strategy going forward.’
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Company profile
With over €38 bn in real assets under management, Praemia REIM is a major, independent real estate asset management platform in Europe. Based in Paris, the company is active in 11 European countries and has 550 staff covering the entire property value chain: investment, asset management, fund management, property management and investor relations.
In 2023, it sealed one of the largest healthcare property portfolio transactions in Europe with the acquisition of a controlling stake in Icade Santé for €1.4 bn. Today alternative asset classes, mostly healthcare properties, make up over half of the group’s portfolio. Praemia REIM is owned by investor Latour Capital, UK fund management group Bridgepoint, life and savings insurance firm Sogecap as well as company employees.
