AXA raises ¥26bn Japan RE debt vehicle

The real estate-focused asset management arm of French insurer AXA has brought its Japanese debt program to ¥40 billion with the launch of a second vehicle.

AXA Real Estate, the real estate asset management arm of French insurer AXA, has launched a second Japan-focused real estate debt vehicle with ¥26 billion (€192 million; $259 million) committed from two Japan-based AXA insurance companies, according to a firm statement.

Following on its ¥15 billion debt vehicle launched in 2011, AXA has now brought its Japanese debt platform to approximately ¥40 billion of capital commitments. The first vehicle is now fully invested, according to Tetsuya Karasawa, AXA Real Estate’s deputy head of Japan, and should have about four more years before it is fully realized.

Debt from the second vehicle is expected to be loaned to owners of office, retail and logistics properties within the greater Tokyo area. It is expected that the fund will contain between seven and eight loans when fully invested, Karasawa told PERE. The fund’s target interest rate will be about 180 basis points, while the minimum is 150 basis points. The average loan will have a life of 4 years to 5 years.

“The success of the first investment vehicle over the last two years has been largely a result of our local team’s understanding of the Tokyo property market, combined with the specialist experience of our real estate lending team,” Karasawa said in the statement. Isabelle Scemama, AXA Real Estate’s head of real asset finance, also described this new vehicle as “an important milestone” for the firm.

AXA is expected to deploy the capital of the new vehicle over the next three years with the first loan made before the end of the year.

With approximately €46 billion of assets under management globally, AXA invests in 12 countries altogether, but in Asia is only active in Japan and China. The firm is also raising a core Tokyo Office Property fund targeting and held a first close on ¥10 billion earlier this year.