US - AFIAA-REIM, a leading investment advisor for state pension funds in Switzerland, is looking to become a bigger player in US real estate investment. The company would like to place $500m in the country over the next 12 to 18 months.
AFIAA is a commingled real estate investment fund for tax-exempt Swiss pension funds. There are now four major investors in the fund. One of these is the civil services pension fund.
Hans Jurg Stucki is managing director of AFIAA-REIM. He said: "We are now looking to expand our operations in the United States."
He believes that 80% of the capital will go into direct property acquisition and the other 20% into commingled funds. The investment strategy for direct transactions will be for properties in the core and core-plus sectors.
The favoured property types would include office buildings and shopping malls from 200,000 to 700,000sf. The average sized transaction would vary from $30m to $60m.
AFIAA will not have an easy task finding deals in the US. There is way more capital in the market than deals to support it. And more capital is continuing to flow in.
AFIAA now owns two office buildings in the US through its direct ownership program. The most recent deal was the $24.8 million acquisition of the 190,000sf One City Place in downtown Philadelphia. This was an all-cash deal. The cash-on-cash return for this deal was 6.5%. The property is 100% leased for the next 10 to 20 years.
AFIAA also owns an office building in downtown New York. This is the 220,000sf tower at 156 William Street. The property was bought for nearly $42m in late July.
AFIAA has also placed some capital in commingled funds. One of these was the Hines Sumisei US Core Office Fund. Another is a residential investment fund with AIG.
AFIAA has established a US subsidiary known as AFIAA US Real Estate Inc. It is controlling a portfolio of investments worth about $1bn.