AXA IM Alts has raised €800 million following the first closing of fifth-generation development strategy focused on the residential and office sectors in Europe, which seeks to meet society’s changing real estate needs after the pandemic. The equity was raised from five Asian, North American and European institutions.
The group’s strategy will prioritise opportunities in France, Germany and the UK, but with the flexibility to deploy capital in Europe’s other key real estate centres and capitalise on the differences in timing between individual real estate markets.
Similarly, the strategy will have the flexibility to invest across all asset classes, but will primarily focus on the development of office and residential assets in locations which have shown long-term liquidity and which are set to benefit from urban infrastructure investment.
AXA IM Alts believes these sectors offer a compelling investment case characterised by structural supply demand imbalances and are benefitting from mega themes including urbanisation and technology-led changes in how people live, work and play which have been accelerated by the Covid-19 pandemic.
“This significant amount of capital raised at first closing reflects our clients’ trust in a strategy that has a more than 20-year track record and an extremely solid performance, with a 15+% IRR on each generation”, said Florence Dard, global head of client group, AXA IM Alts. “Our ability to continue attracting capital from a globally diverse investor base is a strong endorsement of our approach and reaffirms the continued attraction of the European real estate sector.”
AXA IM Alts, a global leader in alternative investments with around €157 billion of assets under management, will pursue an opportunistic long-term capital appreciation strategy by implementing a develop-to-trade approach which takes advantage of investor demand for large, high-quality income-producing assets which are future-proof and have strong ESG credentials.
The new development strategy will seek to employ the latest in sustainable building design to satisfy demand through the delivery of well-located, new offices that incorporate state-of-the-art technology from the outset, allow for more efficient use of office space to meet the requirement for flexible working patterns, adopt a customer service-led approach and have a strict focus on occupier health and wellbeing.
High quality residential development, through new-build projects and the conversion of old office stock, is another conviction call for the group. As the sector remains structurally undersupplied and as urbanisation is expected to continue to drive demand, AXA IM Alts will seek to develop build-to-rent assets especially for middle-income and affordable homes. These types of assets are also highly desirable for institutional investors who are attracted by the granularity and durability of income they offer.
An integrated approach will underpin investment and development activity, focused on the three key pillars of decarbonisation of building stock, resilience to the impacts of climate change and building to meet the needs of tomorrow. All projects will be reviewed against strict responsible investment criteria, targeting maximum achievable sustainability certification.