Ivanhoe Wants to Double the Size of Its European Platform

Less than a year after being appointed Head of Europe, Karim Habra reveals his strategy and ambitions.

Less than a year after being appointed Head of Europe, Karim Habra reveals his strategy and ambitions.

Leaders League. How do you view the year 2019 with regards to the European real estate market? 


Karim Habra. With caution and selectivity but also with optimism. The European real estate market is at the top of a cycle and an accumulation of uncertainties forces us to be vigilant. Market fundamentals remain healthy and reinforce our investment strategies. We want to double the size of our European platform, which currently manages eight billion euros, within three to four years. 
However, we will only make acquisitions if we identify the opportunities that will protect us, in particular, against a downturn. We will focus on long-term value creation in a build-to-core-to-hold logic. We focus on core plus, value-added, and even speculative investments. 
We can also look for value creation by focusing on the transformation of territories, as we did last year in Cap Ampère in Saint-Denis Pleyel, a future hub of the Grand Paris Express.


According to you, what will be the growth markets and those that will be abandoned by investors in 2019? 


Currently, the UK market appears to be frozen due to uncertainties around Brexit. But the situation could change by the end of the year. We are setting up an operational team in London to seize, when the time comes, the opportunities in this market where we manage about one billion pounds of assets today. 
We are also establishing ourselves in Berlin because the German market remains essential in Europe, just like that of Greater Paris. We also continue to scan the Milanese market as it faces a shortage of Class A products and, as everyone knows, northern Italy is one of the richest regions in Europe. Finally, we are approaching Central Europe in a more opportunistic manner. 


What are Ivanhoe Cambridge’s main investment strategies in Europe under these conditions? 


First of all, we are orienting ourselves towards office buildings where we will be able to create value through a restructuring or a development in order to make class A products. To conclude these operations, we can use various means: direct acquisitions, club-deals, purchase of operating or listed companies, investment in a fund, etc. In partnership with Icamap, we have just launched Icawood, an investment and development fund. This investment vehicle has 750 million euros of equity, for a total investment capacity of 1.6 billion euros, allowing the realization of 200,000 to 300,000 square meters of office space with a low carbon footprint which will be completed by 2028 in the Greater Paris area.

Logistics is also important to our investment strategy. We have partnered with Peel Group and Macquarie Capital in the UK to develop large platforms near London, Manchester and Liverpool. We want to replicate this model in France, Germany and Southern and Central Europe. This will be one of our priorities for 2019.


François Perrigault

Read the full Special Report: MIPIM 2019 - Cannes

When is the cycle going to end? While the question has been discussed at length by real estate professionals in recent months, the general consensus seems to be ‘no time soon’. Several of the leaders interviewed for this special report have committed their companies to targeting core office properties to hedge against a possible market downturn. That is just one of many strategies being deployed by investors in Europe in 2019. Leaders League gives you a 360-degree perspective on the state of play in the industry today, in the company of its main players.
Summary MIPIM 2019 Round-Up Allianz Real Estate is Working on Its Asset Pool to Create Value AXA IM-Real Assets Expects to Remain Active Across the Entire Risk Spectrum Paref’s Strategy Rests on Three Principal Pillars La Française Aims to Redirect its Focus to Interconnected Urban Centers AEW Favor Core-plus and Value-added Strategies We Invest in Products That are Core/core+ With a Long-term Approach Primonial is in Lockstep With Developments in the Market Diversification of Our Asset Allocation is Our Watchword for 2019 Covivio Will Use Three Pillars to Further Improve Results


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