AXA IM Alts is a global leader in alternative investments with c. €153 billion of assets under management as at 30 September 2020(1), across real assets (real estate & infrastructure), private debt & alternative credit, and private equity & hedge funds. AXA IM Alts employs over 700 people located in 16 offices around the world and serve the needs of more than 350 clients from Europe, North America, Asia Pacific and Middle East. We are a global leader in real assets investment with c. €102 billion of assets under management, the number one property portfolio and asset manager in Europe(2), and one of the largest worldwide. 

  1. Source: AXA IM Alts data (unaudited).
  2. Source: INREV Fund Manager Survey, June 2020. #1 Real estate manager headquartered in Europe based on total assets under management.

Sector forecasts

Industrial: The US industrial market has, so far, weathered the COVID -19 pandemic well. Stay at home orders and the shutdown of non-essential retail generated a surge in e-commerce sales resulting in increased demand for well- located Class A logistics space as e-commerce dependent companies scrambled to manage the stress on their supply chains. The national vacancy rate remains near historic lows and, with top logistics markets operating at sub-3% vacancy with significant competition for quality space, upward pressure on rents is expected. Furthermore, strong investor appetite could lead to further, albeit slowing, cap rate compression, further driving returns. 

Office: The COVID-19 pandemic has had a severe short-term impact on the US office market. Stay at home orders affecting much of the country at the start of the Q2 2020 bought the leasing market to its knees. Unable to tour assets and uncertain regarding future space requirements, occupiers adopted a wait-and-see attitude toward CRE decision making. The impact on office supply has been far more muted. Although some projects have experienced delays related to staffing and material procurement, pushing delivery into the following quarter, the material impact has been minimal. This disconnect between supply and demand is likely to cause an uptick in vacancy, albeit from very low levels, and rental growth to stall in the short-term.

Residential: Multi-family housing has proved its resilience during the pandemic with little sign of rent delinquencies materialising. Delayed deci-sions around home purchases and marriage remain demand drivers for the multi-family sector but single-family is also proving popular as older millennials begin to start families and take advantage of record low mortgage rates. Multi-family completions continue unabated but with over half of this supply concentrated in the most expensive markets, occupancy rates may soften further. Uncertainty relating to personal finances has benefitted cheaper suburban markets and Class C properties in the urban core. These lower cost accommodation options have fared significantly better than Class A properties in the most expensive locations, limiting both vacancy increase and rental declines. 

Retail: Retail remains the underperformer of the traditional property types. Retailers already under pressure from the growth in online sales suffered a double whammy as physical stores were forced to close leading to 40+ national chains announcing store closures. However, it is not all bad news. By June 2020 retail trade had recovered and consumer confidence was starting to pick up. Furthermore, essential retailers, off price retailers and health and wellness occupiers have continued to expand. With convenience being key, grocery anchored neighbourhood centres are expected to outperform malls in the short-term - particularly small-format, open-air, community centric centres with space to adapt for omni-channel fulfilment. 

Investment principles & strategy

AXA IM – Real Assets’ core business is real asset portfolio development and asset management. It aims to provide expert global real estate and infrastructure investment solutions throughout market cycles, supporting every client’s unique strategy. AXA IM – Real Assets launches and actively manages or advises real asset portfolios, seeking wide-ranging opportunities through a variety of investment strategies along the risk spectrum: from core to opportunistic, country-specific to geographically diversified, sector-specific to multi-sector. Its 360°, multidisciplinary real asset approach allows it to combine different management styles and expertise, to provide clients with individual investment solutions and deliver targeted returns commensurate with specific investor risk profiles and objectives.

Strategic corporate development

AXA IM – Real Assets’ strategic objective is to become a global player, answering clients’ needs through a 360° view on real asset investing. In a rapidly evolving environment, the company continues to pursue both its medium and long-term development plans and sees active long-term real asset investment management as its value-added area of growth. It focuses its strategic development initiatives on the following key areas:

  • Strengthening its relationship with clients;
  • Growing its geographic presence;
  • Pursuing selective product line expansion and innovation to meet client needs;
  • Reinforcing its governance, operational excellence and risk management frameworks

Compliance statement

The information, answers, statements and analysis (together the “Material) provided herein by AXA Investment Managers – Real Assets (“AXA IM – Real Assets”) are provided in good faith for the sole use of the company to whom it is addressed and at its sole request. The information contained herein is to be treated as confidential. It is not for use by retail customers under any circumstances. This Material does not con- stitute an offer or solicitation, nor is it the basis for any contract for the purchase or sale of any investment, security or product. AXA IM – Real Assets disclaims any and all liability relating to a decision based on or for reliance on this Material. Analysis and conclusions express the views of AXA IM – Real Assets and may be subject to change without notice. All information, analysis and conclusions herein present AXA IM – Real Assets’ current knowledge and market estimation at the time of its production. Nevertheless, it can come to unintended erroneous statements or presentations and the information may change at any time without previous announcements and/or notices to the recipient of this Material. Thus, a liability or guarantee for the up-to-datedness, correctness and completeness of the allocated information, estima-tion and opinion cannot be assumed. Where past performance, past experience and track record information is provided, this is not necessarily representative of future results: performance is not constant over time and the value of investments may fall as well as rise. No representation is made that any results or other figures indicated in this document will be achieved and that investments will achieve comparable results that targeted returns. Due to simplification, this Material is partial and thus the information can be subjective. The information set forth herein does not purport to be complete and is subject to change without notice.

Responsibility
This document has been prepared and issued by AXA Real Estate Investment Managers, Marketing and Communication Team, Tour Majunga - La Défense 9, 6 place de la Pyramide, 92908 Paris La Defense Cedex.

Sources
The information and data used in this presentation has been sourced from a number of recognised industry providers. We believe it to be accurate and have taken reasonable care to confirm this but cannot offer a guarantee that this is the case. Details of these sources are available on request.

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