AXA IM Alts has raised €799 million at the first closing of its fifth generation development strategy.
The equity was raised from five Asian, North American and European institutions including investors into AXA IM Alts’ four generations of previous development strategies.
AXA IM Alts aims to invest across all asset classes, but will primarily focus on the development of office and residential assets in Europe’s key locations which have shown long-term liquidity and which are set to benefit from urban infrastructure investment.
The company believes these sectors offer a compelling investment case characterised by structural supply demand imbalances and are benefitting from mega themes including urbanisation and technology-led changes in how people live, work and play which have been accelerated by the COVID-19 pandemic.
“Our fifth-generation develop-to-trade strategy is uniquely placed to benefit from an embedded development platform across a European network, built up over nearly 20 years, and matched with access to local, on-the-ground origination and asset management expertise,” said Ian Chappell, Head of Development & Value-Added Funds.
“Whilst development activity slowed during 2020, a flight to safety will prolong capital targeting modern office and residential assets in prime and emerging locations with market leading technology and ESG credentials, increasingly focused on individual health and wellbeing. With COVID-19 disrupting development pipelines, coupled with reduced competition and a retrenchment from the space by some of the more traditional players, we see an opportunity at all stages of the development cycle to create buildings that deliver environmental performance and long-term economic value, for both investors and users. Whilst the office sector has been characterised by uncertainty around future occupier need, it will remain an essential amenity for businesses to attract talent and we expect to see increased demand for CBD locations. We have several very promising residential and office projects in our pipeline which are advancing well, and which evidences our convictions.“
“This significant amount of capital raised at first closing reflects our clients’ trust in a strategy that has a more than 20-year track record and an extremely solid performance, with a 15+% IRR on each generation. Moreover, it is testament to the confidence in the expertise and skills of our 35+ strong pan-European development team. Our ability to continue attracting capital from a globally diverse investor base, with clients from Asia, North America and Europe, is a strong endorsement of the broader AXA IM Alts approach and reaffirms the continued attraction of the European real estate sector,” added Florence Dard, Global Head of Client Group, AXA IM Alts.