Swiss Life to grow European Real Estate Living and Working fund to up to €3b
Swiss Life KVG, the German fund management arm of insurer Swiss Life, plans to grow its Swiss Life REF European Real Estate Living and Working fund to up to €3b, its CFO, Dr. Christine Bernhofer, told REFIRE at EXPO REAL.
The fund, which was launched last December, is supported by Cologne-based investment and asset management company Corpus Sireo Real Estate, which has been part of Swiss Life Asset Managers since 2014.
‘We’re targeting a size of between €2b and €3b for our open-ended public fund,’ Bernhofer said. ‘We expect to invest around €500m next year, a lot of which will go into this fund. We’re opportunistic when it comes to sourcing deals.’
Between 15% and 35% of the fund should invest in healthcare properties, with the same amount earmarked for offices, residential and retail. It will largely target B locations in A cities and A locations in B cities, an approach known as ‘the ABBA strategy’. As such, the fund is hoping to set itself apart from existing open-ended property funds, which tend to focus on the Top 7 cities in Germany. ‘The ABBA strategy and the expansion to key regional cities in Germany, combined with our extensive local expertise, give us considerably better access to potentially attractive properties,’ said Ingo Hartlief, CEO of Swiss Life KVG.
Ten properties have already been purchased for the fund since its inception taking its AUM to more than €100m. In June, it purchased Schönhauser Allee 105 in Berlin, which comprises 2,200sqm of residential space, for an undisclosed sum.
The fund is designed to be the first in a series of open-ended and closed-end property funds for institutional and private investors in the Swiss Life group. For Hartlief, the fund taps into ‘the long-term megatrends of our time’: ‘People are living longer, and as a result the need for healthcare properties has already increased enormously and is continuing to grow,’ he said. ‘Demand for residential properties is also boosted by positive population forecasts for the housing markets in demand. Diversification across different asset classes ensures a stable performance and optimal risk distribution,’ he said.
Corpus Sireo Real Estate announced at EXPO REAL that it had acquired around €1b in new business since the start of the year, including new fund activities and asset management mandates. It will also establish a German residential property portfolio on behalf of several German pension funds. The properties will be held through a Luxembourg-based LP and around €300m will be invested in the portfolio in the next three-to-five years. The portfolio will be geographically diversified and will consist of both existing buildings and new buildings. Acquisitions will be focused in regional centres and selected A-locations.
With companies in Switzerland, France, the UK and Germany, Swiss Life Asset Managers managed properties valued at a total of almost €68b across Europe at end-June 2017.