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What Slowdown? This Investor Did More Than $11B Of Deals Last Year


Real estate investment volumes dropped all over the world last year as a result of the coronavirus pandemic, but some investors' strategies kept them going. AXA Investment Manager’s real assets business completed €9.7B ($11.7B, £8.4B) of deals last year, including €7.6B of acquisitions.

That total was a 49% increase on the €6.5B of deals AXA did in 2019, the company said in a release, and took its real estate assets under management to €76B.

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AXA said it went big in sectors where even before the pandemic it had a strong conviction that there would be growth in the coming years.

Investments into alternative real estate sectors, including logistics, which are supported by clear demographic and structurally driven growth drivers, remained a key focus for the business, accounting for more than €3.3B or 43% of total investment activity in 2020, AXA said.

Logistics accounted for more than 20% of acquisitions, up from 9% in 2019, with almost €1.6B invested in the asset class last year globally, expanding the total logistics platform to €4.3B. Significant investments included the $875M acquisition of a 27-asset portfolio across eight of the 10 largest U.S. logistics markets and a ¥39 billion ($366M, £262M) four-storey logistics asset in Tokyo.

In the UK it made a big splash in the rented residential sector, buying the Dolphin Square residential block for around £850M, the UK’s largest-ever transaction for a single residential asset. 

Last year saw AXA further consolidate its position in the data centre sector through the purchase of one of Tokyo’s largest data centres. The business also progressed its strategy of undertaking long-term private equity investments into operational platforms with the acquisition of Kadans Science Partner, giving it entry into the emerging European life sciences sector.

“The pandemic that dominated almost all of 2020 and now looks to be a key feature for the majority, if not all, of 2021 has made us look at many aspects of how we use real estate in a different light,” AXA IM Alts Global Head Isabelle Scemama said. “However, many of the changes we have seen over the last 12 months are an acceleration of themes that were already highly prevalent. Our strong conviction is that the general technological and urbanisation themes supporting our main conviction asset classes remain. We will therefore continue to invest in residential, logistics and life sciences through portfolio and asset acquisitions as well as via operational platforms. 

“The economic damage caused by the pandemic will also lead to a lower for even longer interest rate environment, further enhancing the appeal of the alternatives asset class — in its broadest sense — as a source of sustainable yield for investors.”

Bisnow is holding a capital markets digital event on 16 March, looking at where the smart money is investing in the post-COVID world. Sign up here.