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With its 360° investment approach, AXA Investment Managers-Real Assets has managed to position itself as a leader in the management of portfolios and real estate assets in Europe. CEO Isabelle Scemama unveils her 2019 roadmap.
Leaders League. How will the 2019 European real estate market pan out?
Isabelle Scemama. We enter 2019 cautiously optimistic on the outlook for European property. While we accept that the economic cycle is well advanced, and the pace of growth is slowing, the underlying fundamentals for real estate remain sound with pockets of a supply only now emerging. From a pricing perspective, the slower growth is likely to limit the extent of interest rate rises which should continue to support real estate valuations for the foreseeable future. However, in the context of being in the later stage of the business cycle we continue to favour sectors which are less aligned to the business cycle and/or underpinned by structural growth stories including demographics and technology.
According to you, what will be the key real estate markets in 2019?
Southern Europe and the Nordics look likely to benefit from a growth perspective but property pricing across Europe has seen such a degree of convergence that we do not expect 2019 to be a year of geographical allocations driving performance. Instead, we expect to see a ‘boots on the ground’ asset management approach with transaction teams generating additional value by finding and executing on opportunities to enhance on assets to increase their income. For example through lease-up or capital expenditure/refurbishment plays.
What will be the main investment strategies of AXA IM-Real Assets in Europe in these markets conditions?
We expect to remain active across the entire risk spectrum – from senior loans, through core direct, value-added and development initiatives – on behalf of our varied and global client base. However, with the rate of growth likely to slow, we will remain prudent and vigilant as we seek to leverage our strong local presence and reputation in the market to source attractive investment opportunities that should continue to deliver the returns our clients have come to expect from our platform.