AXA Real Estate Investment Managers is expecting to invest €6.3bn (£4.6bn) this year, making the bullish forecast off the back of a strong performance last year.
The specialist property fund manager said today it would invest the funds on behalf of a broad range of clients, including closed-ended funds, insurance company and open-ended German funds such as Immoselect.
As a diversification measure it will continue to extend its activities in Asia and has around €1bn (£740m) allocated to invest in Japan, India and other Asian markets. It will also further develop its retail business and ‘seize opportunities across Europe’ with Germany remaining a key target market.
Paris and Brussels still strong
Steve Smith, Axa REIM’s global head of asset management and transactions, said: ‘We believe that some traditional office markets such as Paris and Brussels will offer fair short term value and in retail, Barcelona and Madrid are still seen as potential best performers.
‘On a cautionary note, even in the midst of sub prime concerns, we believe that demand for assets in these core locations will remain strong and acquisitions will be selectively pursued in the context of stubbornly unyielding prices.
‘We are also seeing some very significant arbitrage opportunities developing between the listed sector, derivatives and the direct market, which could provide interesting opportunities as the year unfolds. We are also actively engaged in sourcing real estate debt opportunities for our clients and given current pricing we expect to develop significant volume in the next period.’
Strong 2007 results
Last year Axa REIM invested €5.7bn (£4.2bn) directly into property during the calendar year reflecting a 54% increase on 2006 when €3.7bn (£2.7bn) was invested.
Major purchases included the €142.6m (£105.8m) IBT portfolio in Austria for Immoselect and a €466m (£345.7m) hotel portfolio operated by Accor in France and Switzerland. Most of the purchases took place in the second half of the year before the US sub-prime crisis began.
During the same period it also sold €3.9bn (£2.9m)of property which was up nearly 100% on 2006. Deals in the listed sector, particularly in Switzerland, included the CHF363m (£167.4m) sale of a 20.1% share in Swiss Prime Site.