AXA Investment Managers – Real Assets has €100bn in assets under management, including €69.2bn in direct property and infrastructure and €26.3bn in real asset finance as of end of December 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 Europe(2), and one of the largest worldwide.
Our teams have been managing funds and mandates for over 30 years and comprise over 600 people in 14 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, country specific to geographically-diversified, sector-specific to multi-sector. Its 360° multi-disciplinary real estate approach allows it to combine different manage-ment styles and expertise, 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
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 constitute 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.
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