Swiss Life Asset Managers has reported a surge in European real estate transaction volumes over 2018 compared with the previous year and expects the outlook for the asset class to remain strong on the back of continued high institutional demand.
The Zurich-based asset manager said on Wednesday it carried out roughly €10 bn of transactions in Europe last year, up from €3.89 bn in 2017.
Around €7.6 bn of residential and commercial real estate was acquired in the Swiss, French, German and UK markets in 2018. On the sale side, Swiss Life disposed of around €1.9 bn in residential and commercial assets. Around €500 mln was invested in project developments.
At the end of 2018, Swiss Life AM managed real estate assets totalling €81 bn Europe-wide. This compares with €69.2 bn at end-2017, a figure which placed the company at the top of PropertyEU’s Top100 Investors ranking by AUM last year for the fourth year in a row.
Commenting on the 2018 results, Stefan Mächler, Group CIO of Swiss Life, said: ‘We were able to expand our real estate business in all countries and use categories in 2018 despite a highly competitive market. Due to the risk premiums, which remain attractive, institutional investors continue to show strong interest in real estate.’
He continued: ‘In 2018, we aligned our spectrum of fund products even more consistently with the needs of these customers as well as those of private investors. In this way, we hope to offer them unrivalled access to the European real estate market.’
In addition to its recently launched hotel real estate fund, Swiss Life AM manages a pan-European retail real estate fund introduced in 2017. The asset manager is also planning a European healthcare real estate fund and a Europe-wide thematic investment strategy with core/core-plus returns. This fund will invest in large European cities and regional centres based on socio-economic drivers such as infrastructure, demographic shifts and technology.
‘Our real estate products rest on our 1,400 employees’ extensive knowledge of the market and many years of local expertise in various real estate use categories,’ Mächler said. ‘The depth of value-added in Swiss Life Asset Managers’ real estate management is backed by a well-founded approach to research and risk management. We are now systematically integrating environmental and social issues, as well as ones relating to good corporate governance, into our investment processes and are thereby making the investments more sustainable.’
