AEW is one of the world’s largest real estate asset managers with €68.2bn of assets under management as at 30 June 2019. AEW
has over 700 employees, with its main offices located in Boston, London, Paris and Singapore, and offers a wide range of real estate investment products including comingled funds, separate accounts and securities mandates across the full spectrum of investment strategies. AEW represents the real estate asset management platform of Natixis Investment Managers, one of the largest asset managers in the world.
AEW is one of the leading European real estate investment managers with over €30bn of real estate assets under management in Europe as at 30 June 2019. With over 400 employees operating from 12 locations throughout Europe, AEW has a long track record of successfully implementing core, value-add and opportunistic investment strategies on behalf of its clients. In the last five years, AEW has invested and divested a total volume of over €20bn of real estate across European markets.
INDUSTRIAL: The European logistics market keeps showing good momentum amid solid levels of investment activity. The sector continuesto benefit from positive macro-economic conditions, robust consumer confidence and increasing online retail penetration. We expect to see positive rent growth for the sector overall for the next two years amid growing occupier demand from retailers’ e-commerce fulfilment and third party logistics providers. With current low levels of vacancy and more investors funding speculative development, we are seeing some increase from recent recordlow vacancies. But, since debt funding for such speculative developments remains unavailable from most bank lenders, market rental growth remains sustainable.
OFFICE: With low unemployment across most of Europe, demand for office space has been strong resulting in continued upward pressure for rents across most prime office markets, especially those driven by tech-related demand. But, with near record low vacancy levels and the lack of large and high-quality stock, the pipeline for new office developments has started to increase and we expect robust rental growth across Europe. There also remains potential for capturing value by focusing on the repositioning of non-institutional assets that can be improved through refurbishment and re-letting. With more facilitating planning regimes, large development pipelines are expected to persist in the CEE region over the next five years, holding back rental growth prospects in the short term. However, the limited availability of debt finance in most other office markets for speculative development offers a favourable outlook.
RESIDENTIAL: With a long-term supply-demand imbalance across many European markets, the multi-family residential sector continues to attract more domestic, intra-regional and global capital. Countries are seeing a revival in rental housing construction, while rent controls are back on the agenda in selected high cost cities. Investors looking for higher returns are focusing on student housing and new housing development in the major cities. Senior housing remains an attractive emerging segment in Europe, with strong demographic and wealth fundamentals and more government support.
RETAIL: Despite the continuing shift to omni-channel retailing, prime high streets and dominant shopping centres are expected to not just survive but even prosper. This is especially the case for those with a vibrant food and beverage or entertainment component. These formats as well as an increased focus on integrating retail in multi-use urban centres, leave innovative new retail formats as a defensive in the face of e-commerce competition compared to other traditional retail centre types. Pressure from online retail has triggered the failure of a number of retailers, with many others looking for rent concessions through CVAs and otherwise. However, rental values for prime retail space is still holding up in the strongest sub-markets, as many pure online retailers are seeking a physical presence in high-impact locations.
Investment principles & strategy
Since its creation in 1981, AEW has been dedicated to creating and implement- ing real estate investment and asset management strategies for institutional and retail investors. AEW offers investors a wide range of investment solutions across Europe, including separate accounts and co-mingled funds across core to opportunistic strategies.
Strategic corporate development
Over the next three to five years, AEW is expecting to grow the European business by launching new funds and continuing to invest on behalf of new and existing separate account mandates. In particular, the firm is expecting to raise further capital for the following funds*:
- EUROCORE: an open-ended, pan-European core fund aiming to build up a modern, future-proof and well diversified portfolio;
- Europe City Retail: a pan-European core fund investing in high-quality retail assets located in central high street locations;
- Europe Value Partners: a pan-European value add fund aiming to provide attractive, risk-adjusted returns investing in a diversified portfolio of assets;
- UK Urban Real Estate Fund: a closed-ended, value add fund investing in a diversified portfolio of assets across the UK; and
- UK Core Property Fund: an open-ended core fund investing in a diversified portfolio of assets in the UK.
* Retail and non-sophisticated investors are not eligible to invest in these funds.
Total AUM includes the assets and businesses managed by AEW SA and its subsidiaries and AEW Capital Management and its subsidiar¬ies and $637m in sub-advisory securities wrap accounts for which AEW provides only a model portfolio. Information relates to AEW as at 30 June 2019. The address provided is that ofAEW SA and is authorized and regulated bythe Financial Conduct Authority/AMF (French securities regulator). The content offered is for information purposes only. It does not constitute investment advice or a recommendation nor is it an invitation or inducement to engage in investment activity. The information and opinions presented have been prepared internally and/or obtained from sources which AEW believesto be reliable, however AEW does not guarantee the accuracy, adequacy, or completeness of such information. Opinions expressed reflect prevail- ing market conditions at the time this material was completed and are subject to change. Investors should consider the investment objectives, risks and expenses of any strategy or product carefully before investing.
News from AEW (Real Estate - Europe)
AEW has agreed a new lease with British furniture retailer Furniture Village, which is expanding its office space at the Bath Road Central business park in Slough by 3,726 sq ft. The retailer will occupy a total of 10,926 sq ft at 258 Bath Road Central on an unexpired term of 10 years.
AEW and Natixis Asset Management complete third close for SELF II bringing commitments to over €500 million download
Two appointments to real estate debt team support further platform growth
AEW Europe City Retail Fund exceeds capital raising target following €415 million capital raise download
AEW announces it has now raised more than €415 million of equity from several international institutional investors, for the Europe City Retail Fund exceeding the Fund’s initial target of €400 million.
AEW announces that it has opened a new office in Madrid as a result of the growth in our assets under management in Spain.
AEW announces the launch of the RESIDYS Fund, its first fund dedicated entirely to French residential real estate.
News from IPE Real Assets
Vehicle targets 4% income yield once fully invested
Investment manager offloads assets five years after purchase
Equity takes Logistis vehicle to €1.7bn
LaSalle buys retail, office space for around €80m
French €25bn pension fund buys Le Triangle
White Papers / Research from AEW (Real Estate - Europe)
Factor Investing In European Offices Smart - Smart Beta Compared To Traditional Styles Q2 2019 download
In this report, we apply our new factor investing approach to close to 40 European office markets for the first time. This framework quantifies factors such as Volatility, Liquidity, Quality, Value, Yield and Growth. A comparison of our factor investing results to the traditional “core” and “value-add” investment styles is also provided.
Most cross-asset institutional investors are organised across three main departments: fixed income (or credit), equities and alternatives. Commercial real estate is typically represented in all three departments. Despite having different terminology and perspectives, investors increasingly look across departments to benefit from each other’s views on fundamental trends in the underlying credit, equity, collateral and property markets.
In absolute terms, European real estate has appeared expensive for the last year, as indicated by record low yields across all four property types.
Over the last few years, institutional investors have increased their exposure to non-traditional or alternative property types, which represented 14% of total direct real estate investment volumes in Europe in the first half of 2018.
French institutions have a low exposure to their residential sector in comparison to German and Dutch investors in their domestic markets. This offers the opportunity for an increase in residential investments in France given the size of the market.
Analysis from IPE Real Assets
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