Zurich Insurance is increasing its global real estate allocation “significantly” and has hired CBRE Global Investors to ramp up its exposure to the UK.
The insurance group, which has around $12bn in global property investments, is looking to increase its 5.5% allocation predominantly through direct acquisitions.
But it will consider appointing third-party managers for separate accounts in new markets, according to Alessandro Bronda, head of global real estate investment strategy.
Bronda, appointed earlier this year to oversee the global real estate strategy, told IP Real Estate that Zurich Insurance has hired CBRE Global Investors to build up a £200m UK portfolio.
He also said the insurer is looking to gain exposure to a number of markets for the first time, including Australia, Japan, Canada and certain unnamed euro-zone countries. Other markets being targeted include Austria, Germany, Switzerland, Italy, Spain, Malaysia, Chile and the US.
Asked whether it was close to appointing other managers, Bronda said: “The first step is to decide whether we want to enter a new market. Once we have decided that we want to, we will then seek the best manager if we don’t have people on the ground.”
The CBRE Global Investors mandate is non-discretionary and is focusing on office, retail, logistics and residential assets in London and other regional UK markets.
Bronda said the Swiss investor expected to see further yield compression in London in 2015.
Zurich Insurance has traditionally invested in core and core-plus assets, but it is now also able to invest in value-added properties – on condition they are in a “good location” – Bronda said.
Bronda said the insurer would consider value-added investments – on condition the investments were in strong locations.
“The biggest challenge for all investors at the moment is to source good quality real estate, and I think next year will potentially be a year where the transaction volume will be higher than this year,” Bronda said.
Bronda was previously Aberdeen Asset Management’s head of global property investor solutions. In his new role, he is in charge of “formulating the top-down strategy”, including where and when to invest globally.
“Together with the local teams, we combine the top-down with a bottom-up strategy,” he said.
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