We Invest in Products That are Core/core+ With a Long-term Approach

After having concluded the purchase of Foncière Vesta at the end of 2018 with Ampère Gestion, Frédéric Bôl is about to sign a portfolio of 28 office properties worth in the region of €1.7bn in Paris’ central business district. Here he outlines his strategy.

© Hervé Tarrieu

After having concluded the purchase of Foncière Vesta at the end of 2018 with Ampère Gestion, Frédéric Bôl is about to sign a portfolio of 28 office properties worth in the region of €1.7bn in Paris’ central business district. Here he outlines his strategy.


Leaders League. How is 2019 shaping up for the European real-estate market? 
 

 

Frédéric Bôl. We are both confident and circumspect. We don’t envisage interest rates increasing by any significant amount in the near future. In addition, a number of players continue to have a voracious appetite for European property. We are always on alert for changes in the market and focus on high quality assets in order to insulate us from the vagaries of the market. The acquisition of Foncière Vesta with Ampère Gestion, and the signing of a memorandum of understanding with Terreïs for the purchase of 28 office properties worth in the region of €1.7bn in Paris’ central business district is in keeping with that strategy. 

 

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

 

Office and residential property throughout France and in the main German population centers remain attractive to investors. Belgium, where we have made a number of purchases in the last year, and Luxembourg are also on our radar. Finally, the hotel sector in Spain and Portugal have good fundamentals. 
In contrast, the United Kingdom is attracting less investment at the moment because of the continuing uncertainty surrounding Brexit and the exchange rate related risks. When Brexit has been definitively resolved, there will probably be investment opportunities there. 

 

In the current investment climate, what are the strategies of Swiss Life REIM? 

 

We invest in products that are core / core + with a long-term approach. We are in the midst of launching a pan-European fund dedicated to investing in the hostelry sector. This vehicle is looking to raise a billion euros spread 33% in France, another third in Germany and the rest in countries such as Italy and Spain. We have already acquired two assets in Portugal under this vehicle. In parallel, we have raised 170 million euros in capital for a fund that will be dedicated to high-street retail. This vehicle also has a remit to invest in the last-mile logistics segment, which is linked to the boom in e-commerce. France, Spain and Germany have been identified as the principal target countries. This fund could reach upwards of one billion euros. Lastly, we are preparing to launch sometime in 2019 a pan-European vehicle  dedicated to silver economy property.   
We have always had an appetite for office real estate - something that continues today, as evidenced by the transaction currently in the process of being negotiated with Terreïs. 
In this portfolio 17 assets will be allocated to funds which we manage and eleven others, worth 1.3 billion euros, will be places in an OPPCI collective investment product and in a Luxembourg fund in order to be made available to our oversees clients. The Foncière Vesta has the specific purpose of developing the residential sector. Five assets have recently been added to its portfolio. Regarding logistics we don’t invest directly in this asset class. But we have a share in the Cargo round table, a Carrefour logistic property company, thanks to an OPPCI which we have structured with institutional actors. The company’s portfolio will continue to develop.

 

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 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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