Swiss Life Asset Managers1 has more than 165 years of experience in managing the assets of the Swiss Life Group. This insurance background has exerted a key influence on the investment philosophy of Swiss Life Asset Managers, which is governed across our real estate platform by principles such as:
- value preservation,
- the generation of consistent and sustainable performance,
- a responsible approach to risks and opportunities, and
- incorporation of environmental, social and governance (ESG) aspects across our investment process.
Our objective is to achieve stable, risk-adjusted investment returns to support our clients to achieve their long-term investment objectives. Given the attractive risk-return profile of the asset class, Swiss Life has committed its balance-sheet capital to real estate for more than 125 years. Swiss Life Asset Managers co-invests with many of its clients, ensuring a strong alignment of interests.
Swiss Life Asset Managers offers this proven approach to third-party clients in Switzerland, France, Germany, Luxembourg, the UK and the Nordic countries and increasingly also internationally with more than 1,800 real estate professionals in 25 locations around Europe.
Alongside insurance assets for Swiss Life Group, assets under management total €265.8bn (as at 30 June 2023), with €114.8bn managed for third-party clients.
Swiss Life Asset Managers is a leading institutional real estate manager in Europe2 with €91.7bn invested in real estate. In addition, Swiss Life Asset Managers has real estate worth €21.6bn under administration, held through its subsidiaries Livit (in Switzerland), Swiss Life Asset Managers Germany and BEOS. Overall, total real estate under management and administration comes to €113.3bn (as at 30 June 2023). Swiss Life Asset Managers employs over 2,200 people in Europe.
1 Brand name under which the asset management and real estate asset management companies of Swiss Life (in Switzerland, France, Germany, Luxembourg, United Kingdom and Norway) have been operating since 2012; however, Swiss Life Asset Managers itself does not constitute a separate legal entity.
2 INREV Fund Manager Survey 2023 (AUM as of 31 Dec 2022).
INDUSTRIAL: The industrial and logistics sector remains fundamentally well-positioned to ongoing structural changes, including e-commerce, the rise of urban logistics, deglobalisation, near or re-shoring, and automation. As a result, tenant demand has remained resilient despite a weakening of the economy, and supply levels in many markets have not kept pace, creating scope for rental growth (albeit at a slower pace than in recent years). Significant yield compression over the past few years contributed to heightened vulnerability to rising interest and government bond rates, which caused capital values to decline over the first half of 2023. As the economy stabilises, we expect transaction volumes and therefore pricing to recover, albeit asset specification and location will remain critical determinants of future performance.
OFFICE: The office sector continues to face several challenges related to hybrid working and tightening ESG regulations. As a result, both occupiers and investors remain focused on prime, Grade-A space, which can provide flexible working spaces and a high level of amenity, in well-connected, mixed-use locations. Supply shortages are expected to become more acute, particularly as sustainability requirements increase, which should underpin rental growth for this segment. We expect rental and capital value growth to vary greatly, between building quality and location, so it will be critical to understand market dynamics when underwriting asset performance.
RESIDENTIAL: The residential market is less sensitive to economic cycles relative to other real estate sectors as occupier demand is driven by demographics as opposed to business growth. In fact, arguably recent economic developments are having a positive impact on demand as homeownership becomes less affordable. Meanwhile, many European markets suffer from chronic housing shortages, which is expected to intensify due to elevated construction and financing costs. Favourable supply-demand dynamics are suggestive of rental growth over the medium term. However, tenants may be unable to carry significant rental increases and so affordability levels should be a key focus.
RETAIL: Loss of real wages and poor consumer spending continue to weigh on the retail sector. Despite elevated financial pressures, pockets of opportunity can be found in convenience-led shops, food stores and retail parks, in particular those let on a long index-linked lease. This year, rental value growth is expected to vary across Europe, mostly driven by individual market fundamentals and local inflation rates, and then stabilise gradually over the medium term.
OTHERS: Despite current cost pressures, in many markets, tourism has rebounded close to or above pre-pandemic levels. Well-located hotels with an attractive offering for both business and leisure guests are expected to show greatest resilience and offer scope for performance. For the healthcare sector, strong demographic shifts across Europe and the strategy to diversify portfolios into alternative sectors continue to support investor demand for healthcare assets.
Investment principles & strategy
The world and the economy are changing and demanding more from the built environment. This has manifested in a shift in the way occupiers use properties, including the lease terms they are seeking. Against this backdrop, we focus on ensuring that our clients’ portfolios reflect this ‘new world’ shaped by globalisation, digitalisation and societal change. For us, managing assets and risks means protecting wealth and increasing long-term earnings potential. Our investment management is based on understanding our clients’ risk and return expectations and accurately reflecting them in our approach to the market. Our main priority is to invest responsibly and act prudently with the assets entrusted to us.
Investment decisions are based on in-house research expertise and a rigorous investment process.
Therefore, we manage risk actively and perform risk controls systematically on an ongoing basis to monitor the individual portfolios. These controls enable our clients to review risks any time and compliance with the predefined investment process. The aim is to identify risks early so as to avoid or mitigate them, and to exploit opportunities for the benefit of our clients.
Strategic corporate development
Over the past years, Swiss Life Asset Managers has constantly grown its business activities organically and inorganically. We offer comprehensive services across the full real estate value chain with strong European roots and 25 offices in Europe with over 1,800 real estate professionals.
- Capabilities: Closed and open-ended real estate funds (listed and non-listed), investment foundations, dedicated mandates and separate accounts, fund of funds, JVs, club deals.
- Sectors: Office, retail, residential, healthcare, hotel/hospitality, student housing, logistics, light industrial and corporate real estate, life sciences.
- Broad range of investment strategies across the risk/return spectrum with specific focus on well-diversified pan-European core/core-plus or selective value-add capabilities.
- Thematic and sector-focused investment strategies such as European industrial and logistics, healthcare, hotel and leisure.
Swiss Life Asset Managers also acts as a partner for co-investments in Europe.
Swiss Life Asset Managers has a history of more than 125 years managing real estate and a proven track record across all sectors through different market cycles.