AEW is one of the world’s largest real estate asset managers with €62.1bn of assets under management as at 30 June 2018. AEW has over 600 employees, with its main offices located in Boston, London, Paris and Singapore and offers a wide range of real estate investment products including commingled 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 €29bn of real estate assets under management in Europe as at 30 June 2018. With over 300 employees operating from 10 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 €19bn of real estate across European markets.
Industrial: The European logistics market continues to show strong momentum amid high levels of investment transaction activity, mostly on the back of portfolio sales. The sector continues to benefit from improving global macro-economic conditions, robust consumer confidence and increasing on-line retail penetration. We expect to see positive, although geographically uneven, rental growth for the sector over the next two years amid growing occupier demand from manufacturers and retailers’ e-commerce fulfilment. Furthermore, with the current low levels of vacancy and modest levels of new supply, more investors are funding speculative development opportunities. Debt funding for such speculative developments remains unavailable from most bank lenders ensuring a sustainable trend.
Office: Strong economic conditions in Europe are resulting in declining unemployment, which in turn drives the demand for office space. This has resulted in continued upward pressure for rents across many prime office markets, especially those driven by tech-related demand. Low vacancy levels and the lack of large and high-quality stock is expected to drive demand for office development in Europe. We expect robust rental growth across Europe, with cities such as Berlin, Madrid, Amsterdam, and Stockholm among the outperformers. 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. These will typically be Class B assets in core locations or good quality assets in locations which are likely to improve due to changes in local demographics, business dynamics or infrastructure. With more facilitating planning regimes, large development pipelines are expected to persist in the CEE region over the next five years. This is likely to hold 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 domestic, intra-regional and global capital. Most countries are seeing a revival in housing construction. 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 large, 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 remain defensive in the face of e-commerce competition compared to other retail centre types. Continued upward pressure on rental values for prime European retail space is therefore likely with especially strong growth in Spanish and Italian prime shopping centres.
Investment rinciples & strategy
Since its creation in 1981, AEW has been dedicated to creating and implementing 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–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*:
- 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 Core Property Fund: an open-ended core fund investing a diversified portfolio of assets in the UK; and
- RESIDYS: a French residential fund investing in standard residential assets and non-medicalised senior housing.
*Retail and non-sophisticated investors are not eligible to invest in these funds.
AUM is gross asset value as of 30 June 2018. Total AUM includes the assets and businesses managed by AEW Capital Management LP and its subsidiar¬ies and AEW SA and its subsidiaries and €711m in sub-advisory securities wrap accounts for which AEW provides only a model portfolio. Other infor¬mation save where otherwise indicated relate to AEW as at June 30, 2018. The address provided is that of AEW SA and is authorized and regulated by the 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 believes to be reliable, however AEW does not guarantee the accuracy, adequacy, or completeness of such information. Opinions expressed reflect prevailing 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)
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.
Future-proofing European Retail download
How is European retail going to face its challenges?
Direct property is relatively more attractive in Belgium than in the Netherlands according to our Direct European Real Estate Relative Value Index.
Analysis from IPE Real Assets
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