AXA Real Estate Investment Managers has launched the UK Long Lease Property Fund, which aims to offer UK institutional investors, pension schemes and investment consultants a new property-based, liability matching solution with long and secure income streams. AXA Real Estate is the leading real estate portfolio and asset manager in Europe, with over 43 billion of assets under management as of September 2012.
This new open-ended fund will offer investors, and pension funds in particular, the opportunity to invest in a broadly diversified portfolio of UK long lease assets, with a focus on strong property fundamentals that enhance the defensive profile of the Fund. AXA Real Estate will also draw on its dedicated Alternatives and Hotels Business Lines to provide investors with expertise and exposure to a wider variety of sectors.
The Fund will target a range of sectors from traditional long lease assets like supermarkets, distribution centers and offices, to more alternative assets such as healthcare, social housing, student accommodation, hotels, leisure, automotive and ground leases.
The UK Long Lease Property Fund will aim to maintain a long weighted, unexpired average lease term of 20 years or more mostly with inflation indexation or fixed rental uplifts underpinned by high quality tenant covenants. This strategy is expected to generate long term and stable income streams often with inflation indexation for institutional investors that are looking for investments with liability matching attributes and is particularly well suited for pension schemes.
AXA Real Estate has raised an initial £125 million (approx. €135 million) and aims to grow the fund to a size of around £1 billion (approx. €1.2 billion) over the next five years.
Source: AXA Real Estate