Swiss Life Asset Managers carried out €3.9 bn of real estate transactions last year, with the difference between buying and selling lifting assets under management by its European property businesses by €1.8 bn to €69.2 bn.
Swiss Life AM's core markets of Switzerland, Germany, France and the UK, saw the acquisition of residential and commercial properties worth €2.9 bn last year. Disposals of residential and commercial real estate over the same period amounted to around €1 bn.
In 2017, the real estate acquisition business was dominated by individual and portfolio acquisitions for investment vehicles managed by Swiss Life Asset Managers as well as for the real estate portfolio of Swiss Life's insurance companies. The retail and residential use classes accounted for the bulk of the acquisitions. More than €1.2 bn flowed into retail properties, while just under €1 bn was spent on buying residential properties.
Stefan Mächler, Group CIO of Swiss Life: 'All real estate units contributed to the positive trend of our results. In 2017, we expanded our range of fund products for institutional and private investors internationally and in this way are giving our clients unique access to the European real estate market. But the environment remains challenging, interest rates remain still low, transaction volumes were down slightly and the European real estate market did not grow as strongly in 2017 as in the previous year.'
Top Investors
The 2017 transaction activity is down on the €7.4 bn volume that put Swiss Life AM in second place in PropertyEU's last Deals and Dealmakers ranking. The ranking, based on European real estate transaction activity during 2016, was published in March 2017. The next Deals and Dealmakers ranking, based on 2017 volumes, is published in May this year.
Swiss Life AM
The Swiss group has fully fledged real estate businesses in Switzerland (Swiss Life AM), France (Swiss Life REIM), Germany (Corpus Sireo and Swiss Life KVG) and the UK (Mayfair Capital). Swiss Life AM also plans to become more active - through its own operations - in the Scandinavian, Benelux and Central and Southern European investment markets.
Switzerland
Swiss Life Asset Managers says that it is 'aiming for a further incremental expansion of its real estate holdings in Switzerland by purchasing outstanding properties in top locations in the residential, office and retail sector'. Investment will also focus on niche segments with high growth potential such as healthcare properties, student residences and coworking spaces. In addition, at the end of 2017 Swiss Life Asset Managers launched a real estate fund exclusively for purchase by qualified investors, which invests in prime-quality properties across European cities and regional centres.
The most important individual acquisitions in Switzerland include the mixed-use property Hochhaus zur Palme in Zurich; the Esplanade 1 new-build office building in Geneva's Pont-Rouge quarter and eight residential high-rise buildings in a new area of Schaffhausen being built on the former steel foundry site.
France
Last year saw Swiss Life Asset Managers launch eight new funds, including a pan-European retail real estate fund exclusively for purchase by institutional investors in France and the first SCPI real estate fund, similarly for purchase only by French investors. Aimed at French private investors, the public real estate fund invests in French and German operator-run properties, such as hotels or healthcare properties.
Last year's most important individual acquisitions in Paris included the Palatin I office building in the La Défense district; the office building at 83 Rue la Boétie; the Ivry student residence project; the food and gastronomy market hall Secrétan, as well as the Les Bains Douches project, which combines living with coworking and was nominated for the Reinventing Paris competition.
Germany
Last year, Corpus Sireo Real Estate, which is active in Germany together with Swiss Life KVG, launched five new special real estate funds and investment vehicles for institutional investors via the regulated platforms of Swiss Life Asset Managers in Germany and Luxembourg. In addition, an open-ended public real estate fund intended exclusively for German private investors was launched. The fund already owns 10 properties with an investment volume of around €200 mln and at the end of 2017 won the Scope Award for the best product innovation.
While the institutional funds concentrate on investments sectors types such as office, retail or healthcare, this public real estate fund pursues a diversified investment strategy. The focus is on German and European residential and healthcare properties as well as office and retail properties.
Major acquisitions in 2017 include the Oasis office complex in Prague; the Marximum office complex in Vienna; the mixed-use Castra-Regina-Center in Regensburg and the GK Residential portfolio with properties in six German cities.
Last year also saw the acquisition of undeveloped or developed plots of land for new construction projects or for the revitalisation of residential and commercial properties at a large number of attractive individual locations in Germany. The largest single acquisition was made in Frankfurt am Main, where the Nidus new build project will see the construction of 180 apartments in the Bockenheim district by 2021.
UK
Mayfair Capital's real estate specialists primarily focus on acquiring real estate assets with the potential for rental growth. These were added to the European real estate funds launched by Swiss Life Asset Managers. Mayfair Capital pursues a disciplined thematic approach with its investments on behalf of various new and existing fund vehicles.
Mayfair mainly invests in properties benefiting from their core themes technology, infrastructure and demographics, leading to a focus on the following sectors: regional UK offices, distribution and logistics, and healthcare. Major acquisitions in 2017 included the 6 Queen Street office block in Leeds and the Centrica Building in Oxfordshire. Mayfair’s existing funds performed very strongly in 2017 relative to their absolute and relative benchmarks, Swiss Life said.
Longer self-determined life
Swiss Life AM purchased healthcare properties in the three-figure million euro range for special institutional funds, as well as for the German open-ended public real estate fund. In this way, Swiss Life Asset Managers is responding to the Swiss Life Group's guiding theme of 'the longer self-determined life', which the company consistently addresses in its group-wide campaigns, making it a topic of public debate.
Funds
In response to what it describes as 'high client demand', Swiss Life Asset Managers said it planned to further expand its real estate fund volume. This segment forms the focal point of growth in the company's real estate operations. With new fund investment solutions and its European pillars, Swiss Life Asset Managers aims to meet the needs of institutional investors such as insurance companies, pension funds and employee benefits institutions.
Swiss Life has defined the investment business for third parties in particular as a growth driver. 'The real estate asset class plays an important role for the Swiss Life Group. In a property market that continues to make positive headway, we are posting attractive returns compared with risk-free investments. Growth in real estate business thus needs to expand to all key real estate markets in Europe,' Mächler said.
