AXA Investment Managers – Real Assets, the subsidiary of French insurance giant AXA, has purchased all the properties from Gramercy Property Trust’s European fund in a €1 billion deal, the companies said Tuesday.
Gramercy, a New York-based real estate investment trust, founded Gramercy Property Europe in December 2014 in a joint venture with three hedge funds: EJF Capital, Fir Tree Partners and Senator Investment Group.
Since inception, Gramercy Europe has acquired 35 properties for €725 million with a focus on single-tenant net lease assets, predominantly in industrial real estate, in Germany, the Netherlands, France, Poland and the UK. The portfolio had a cap rate of 6.2 percent on exit.
The transaction is expected to close in the third quarter, and Gramercy’s European investment management subsidiary will manage the portfolio for the year after closing.
It is believed that Invesco Real Estate was among the underbidders for the portfolio.
Capital for AXA's purchase came from a combination of balance sheet capital across AXA's European and Asian businesses, as well as from its core fund, Laurent Jacquemin, the firm's head of European transactions, told PERE. The open-ended vehicle, AXA CoRE Europe, was launched in March of last year with an investment target of between €3 billion and €5 billion. The firm has raised about €800 million to date.
This was the first industrial real estate purchase from the core fund. The firm invested in the property type before the global financial crisis, but determined it was too expensive after the GFC, with large players including Blackstone and Prologis driving up prices, Jacquemin said. Now, as some of those players are becoming sellers, the firm found opportunity in stabilized assets with a long-term hold plan.
“We’ll try to be active in logistics going forward,” Jacquemin said. “We see more and more tenants like Amazon looking for a lot of space, not only in the very established logistics areas but closer to the city, with a focus on last-mile logistics.”
The deal is the latest example of the growing appetite from the world’s largest institutional investors for strategic positions in the logistics sector. In Europe alone, there have been a number of high profile logistics transactions in the past year, chief among them Singapore sovereign wealth fund, GIC Private’s €2.4 billion purchase of P3 Logistics, a logistics property company with 38 million square feet of assets and an 18 million square foot landbank, last November.
AXA IM – Real Assets is sitting on a record amount of capital after it raised a total of €8 billion last year. Among its recent capital raises was an extra €300 million for its open-ended core real estate fund, AXA CoRE Europe, which was launched last year with an investment target of between €3 billion and €5 billion. Also last year, it held a final close of the Pan-European Value-Added Venture, which attracted a total of €445 million.