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: With strong demand and a shortage of modern stock, logistics is expected to outperform the office and retail sectors over the medium term. There are opportunities to develop in some markets, speculatively on a caseby- case basis. Rising land values are pushing up development costs, which are expected to be passed on to occupiers via higher rents, driving returns. With prime yields at historic lows, further yield compression is expected to moderate. However, logistics continues to offer a yield premium over offices and retail in most markets, and can provide a less volatile, more defensive option for low-risk investors.
Office: Underlying fundamentals in Continental European office markets remain favourable, with vacancy rates at their lowest level since 2008. In line with weaker economic growth, rental value growth is expected to slow. However, with interest rates rises being pushed further out, upward pressure on yields is unlikely to materialise in the short term, supporting total returns. Brexit related uncertainty continues to plague the UK, weighing on occupier decisions. Modest rental declines are expected in 2019/20 which, combined with potential upward yield movements, could depress UK office returns in the short term.
Residential: Dynamic household formation and a relatively large rental sector should offer a strong foundation for attractive risk-adjusted returns in the private rental sector. Meanwhile, robust student application numbers and a continued lack of suitable, reasonably-priced accommodation options should support purpose-built student housing, driving modest rental value growth in top-tier university cities. The income profile of this sector is potentially attractive in a late-cycle market context.
Retail: Squeezed margins amidst stiff competition and ever-demanding consumers is putting pressure on retailers, limiting prospects for rental growth in the medium term. We believe prime yields have bottomed out. The sector is expected to underperform throughout the forecast horizon. However, solid private consumption, resulting from loose lending conditions and labour market improvements, is expected to support the best high streets and dominant shopping centres, where experiential retail is the cornerstone of asset strategy. We believe these assets to be more defensive in current market conditions.
1 Source: AXA IM – Real Assets Research, as at 25 September 2018
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 both its medium and long-term development plans and sees active long-term 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, estimation 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.
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.
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.
© 2018 AXA Real Estate Investment Managers and its Affiliated Companies. All rights reserved.
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