AXA Investment Managers – Real Assets has €85bn in assets under management, including €64.3bn in direct property and infrastructure and €16.9bn in real asset finance as of end of June 2019.1
We offer a 360° approach to investing in real assets, which comprises opportunities in equity or debt, across different geographies and sectors, as well as via private or listed instruments. We are a global leader in real assets investment, the number one property portfolio and asset manager in Europe2, and one of the largest worldwide.
Our teams have been managing funds and mandates for over 30 years and comprise over 600 people in 13 offices that operate in over 20 countries around the world, which provide us with in-depth knowledge of countries, cities and sectors.
1 Source: AXA IM – Real Assets unaudited data
2 Source: INREV Fund Manager Survey – May 2019 in terms of assets under management
Industrial: The US industrial and logistics sector remains healthy, with vacancy at historically low levels and rents at new highs. Demand in the first half of 2019 has been driven by 3PLs, logistics & distribution and traditional retailers. Despite trade war concerns, robust demand is expected to continue as high consumer confidence, rising business inventories and continued realignment of the supply chain provide support for the sector. With vacancy at such low levels, net absorption is expected to soften, as occupiers struggle to find space, and speculative development is expected to increase. Healthy pre-leasing levels should maintain upward rental growth in the short term, and with strong investor appetite, further cap rate compression, albeit at a slower rate, is expected to further drive returns.
Office: National office occupancy rose by 20.4m sq ft in Q2 2019 to a year-todate total of 34.4m sq ft, similar to full-year 2018. Tech and mid-sized secondary markets have witnessed the strongest demand driven by the tech and co-working sectors which represented almost one third of national leasing activity. Given that co-working inventory only accounts for c.1% of total office inventory, further growth in this sector is expected in the short term. A strong supply pipeline, more than 62m sq ft is due to be delivered over the next 12 months, is expected to shift the market in favour of occupiers causing rental growth to slow, if not stagnate. With the recent change in FED stance (potential further rate cuts in 2019) top-quartile cap rates could compress further, supporting values.
Residential: Affordable multifamily rental apartments in urban centres and edge of major cities with good transport links continue to perform well. Delayed decisions around home purchases and marriage remain demand drivers but single family is also proving popular as older millennials begin to start families. Multifamily completions are expected to peak in 2019 at almost 300,000 units. With over half of this supply concentrated in the most expensive markets, occupancy rates may soften, but the strongest CBDs, suburbs and edge of city locations where construction remains a small proportion of inventory should perform well. As new supply slows from 2020, greater balance should return to the market with vacancy edging up and rental growth likely to be below long-term average.
Retail: Retail remains the underperformer of the traditional property types as online sales competition continues to place pressure on retailers as they adapt to the omni-channel retail world. While new supply remains limited, given the high level of existing retail stock which characterises the market, this pressure on retailers is expected to continue to limit overall retail demand for the foreseeable future. The convenience grocery-anchored and necessity retail segments are expected to outperform.
Investment principles & strategy
AXA IM – Real Assets’ core business is real estate portfolio development and asset management. It aims to provide expert global real estate investment solutions throughout market cycles, supporting every client’s unique strategy.
AXA IM – Real Assets launches and actively manages or advises real estate portfolios, seeking wide-ranging opportunities through a variety of investment strategies along the risk spectrum: from core to opportunistic, countryspecific to geographically-diversified, sector-specific to multi-sector. Its 360-degree multidisciplinary real estate approach allows it to combine different management styles and expertises, to provide clients with individual investment solutions, delivering 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 with focus on its core business.
In a challenging environment for the industry as a whole, the company continues to pursue its medium and long-term development plans and sees active longterm real estate investment management as its value-added area of growth. It focuses its strategic development initiatives on the following key areas:
- Strengthening its relationship with its clients;
- Growing its geographic presence;
- Pursuing selective product-line expansion and innovation to meet clients’ needs;
- Reinforcing its governance, operational excellence and risk-management framework.
Restrictions on use
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