ULI CONFERENCE Office refurbishment in Paris offers potential, says AXA REIM chief

The Paris office market offers good potential for office refurbishment, according to AXA's Isabelle Scemama.

‘We would consider refurbishment in Paris,’ Scemama told delegates during a panel session on European capital markets at the annual conference of ULI Europe in Paris on Wednesday. ‘There is not so much supply of good quality offices and a lot of supply is obsolete.’

Paris remained the location of choice in France, Scemama said. ‘Paris is more interesting than other cities. For assets in the right location, it’s possible to find a solution.’ While yields are compressing, she said they still provided a ‘good premium’ given the currently low interest rates. ‘Everything being equal, real estate still offers good value compared to the bond market.’

Scemama is CEO of AXA REIM SGP, a subsidiary of AXA REIM, and she is responsible for the management of the funds group, including CRE Finance, Infrastructure, Alternatives, Core & Value-Add funds, and European Sales.

In addition to offices, AXA REIM also likes healthcare, particularly in the big cities. ‘This is one area that we really like in Europe. We are definitely lagging the US in this area and expect fundamental growth in this asset class. Logistics is also of interest,’ she added.

Aside from regular and niche investment classes, AXA REIM has also become one of the leading European players in real estate debt. At present, the debt portfolio is close to €11 bn, Scemama said. ‘We will continue to grow our debt platform and are trying to globalize it and include listed instruments.’

Commenting on the overall prospects for the real estate market, Scemama conceded that the repercussions of geopolitical events could have an impact. ‘But,’ she added, ‘the low oil price and euro should support growth in Europe. Globally the picture is quite good.’

The terrorist attacks on Paris last November have had an impact on shopping behaviour in the French capital, Scemama said, but added that impact was short-term. ‘The picture is not too bad for Europe…There is no debt oversupply, which is very different to the last cycle. The fundamentals are good.’