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 continues to 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 record low 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 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 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;
· 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 subsidiaries 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 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.