Corporate overview

Generali Real Estate (GRE) ranks among the world’s leading real estate asset and investment managers, overseeing approximately €36.9bn in assets under management as of June 30th, 2024. GRE’s fully integrated model encompasses the entire real estate value chain, from asset management to urban development, supported by over 360 professionals located in the key European cities. Through its regulated investment fund management company, GRE SGR, the firm manages both real estate equity and CRE debt, enabling investors to strategically allocate capital. GRE introduced 12 cross-border investment vehicles that are diversified geographically and by asset type, allowing investors to tailor their portfolios. Focusing on long-term value creation for core/core+ investors, GRE targets assets in prime locations with strong liquidity and solid leasing fundamentals. GRE portfolio is a unique blend of historic and modern assets, including landmarks like Procuratie Vecchie in Venice and modern icons such as CityLife in Milan and Tour Saint-Gobain in Paris. This diverse portfolio allows GRE to lead in innovation, sustainability, and urban regeneration. GRE is part of the Generali Investments ecosystem, bringing a wealth of asset management expertise.

Sector forecasts

INDUSTRIAL: Logistics has solidified itself as a key asset class, driven by structural shifts such as the need to shorten supply chains and boost inventories (moving from ‘just in time’ to ‘just in case’). As tenants grapple with rising supply chain costs, the logistics market has seen a modest correction, with development slowing amidst global economic uncertainty. However, demand for well-positioned assets along major European transport corridors remains robust, as these locations benefit from low vacancy rates and limited supply. E-commerce growth and the scarcity of logistics infrastructure continue to act as tailwinds.

OFFICE: The growth of major European cities fosters a favorable environment for tenant demand, driving stable cash flows for investors. High-quality, well-connected office spaces that promote well-being are particularly sought after. Despite a dip in demand post-pandemic due to cost-saving measures, offices remain essential, especially in prime cities that attract top talent. Prime office buildings with solid tenants also provide an effective inflation hedge. Environmental, social, and governance (ESG) considerations, particularly around energy efficiency and employee well-being, are increasingly influencing tenant and investor decisions.

RESIDENTIAL: Residential markets face pressures from higher interest rates, shrinking household incomes, and government interventions aimed at curbing overheating. However, the underlying trends of urbanization and demand for housing provide resilience. The shift from homeownership to renting is expected to continue, maintaining liquidity in the sector. Residential properties tend to be less volatile and more granular, offering long-term stability for investors.

RETAIL: Retail faces ongoing challenges, with consumer confidence at historic lows and rising costs cutting into profits. Sectors such as fashion, electronics, and home furnishings are particularly vulnerable. As tenant defaults increase, retail rents may come under pressure. However, prime retail locations and high-quality shopping centers continue to attract tenants and offer a relatively attractive yield premium compared to other sectors.

CRE DEBT: As traditional banks grow more cautious in lending to complex real estate projects, alternative lenders are stepping in. Senior real estate loans, with their floating interest rates and conservative loan-to-value ratios of around 60%, are well-positioned to absorb market volatility, offering resilience and hedging against interest rate hikes.

HOSPITALITY: The growth in global tourism is fueling a wave of renovations of outdated properties and the development of new hotel projects. The leisure travel segment has been the driving force behind this recovery, and investors are increasingly looking for opportunities with a value-add approach in this sector. Beyond traditional resort destinations, travel demand is rising rapidly in both primary and second-tier urban markets known for their strong cultural offerings. As tourism continues to expand, the hotel sector remains a promising sector for both value-add and long-term investment strategies.

Investment principles & strategy

GRE manages real estate assets on behalf of both Generali Group companies and external institutional investors. The focus is on core and core-plus investments in major European cities, particularly in the office, logistics, hospitality and CRE debt sectors. GRE maintains a disciplined approach to risk-return management, ensuring a high-quality, diversified portfolio that delivers long-term value. GRE has launched a range of European cross-border funds, each with a specific investment strategy and geographical focus, targeting high-quality assets. ESG principles are embedded throughout GRE’s operations, with best sustainability practices applied across the entire asset lifecycle— from acquisition to management— underpinned by transparent governance at the fund level.

Strategic corporate development

Aligned with Generali Group’s strategy to expand its external investor base, Generali Real Estate (GRE) advanced a cross-border investment program to offer broader exposure to diverse real estate assets, geographies, and risk-return profiles. GRE SGR currently oversees 12 real estate investment funds focused on external institutional clients and plans to expand its offerings in the coming years.

In addition to expanding its fund catalogue, GRE fosters long-term partnerships with like-minded institutional investors through joint ventures and co-investments. GRE’s decades-long track record across continental Europe enables it to deliver tailored investment solutions that align with investors’ strategic objectives, further strengthening its role as a trusted partner in real estate investment management.

Performance verification

Generali Real Estate regularly assesses its performance against globally recognized benchmarks, adhering to best industry practices. Independent third parties evaluate and analyze the performance of each fund on a routine basis, ensuring transparency and accountability.

COMPLIANCE STATEMENT

Generali Real Estate conducts its real estate investment management activities

through Generali Real Estate S.p.A. Società di Gestione del Risparmio (“GRE SGR”), in charge of managing both commercial real estate equity and debt funds through its seasoned professionals located in Italy and France. GRE SGR is passported and authorized by the Bank of Italy, the local regulator, to manage real estate investment funds in the EU under the AIFMD.