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Generali to ramp up US real estate exposure

One of the largest European insurers plans to build upon a small existing portfolio of office and retail assets.

Having amassed a vast €27 billion real estate portfolio, predominantly in continental Europe, Generali Real Estate is now focused on expanding its presence in a largely uncharted market for the company: the US.

“The USA is, I would say, a new market for us, where we're very new entrants,” said Tina Paillet, head of North America and UK at Generali Real Estate, speaking at the RICS Tri-State International Investment Panel 2016 in New York last week.

The real estate arm of Generali, one of the largest insurance companies in Europe, first began investing in the US six years ago, but its exposure in the market to date has remained limited. The Italy-based company currently holds approximately €500 million, or approximately 2 percent of its total property portfolio, across six assets in the US. Its portfolio in the country is 63 percent invested in office properties, while the remainder is in retail.

“What we're looking to do in the US is we'd like to grow our exposure to this market and consolidate the portfolio that we have,” she said.

Paillet said Generali would focus on well-located properties in major gateway cities in the US. She added that the insurer did not have a specific target in terms of how much capital it would plan to deploy in US real estate in the near future, but instead would remain “pragmatic” and invest either via direct acquisitions, joint venture partners or third-party managed funds.

“What we'd like to do is build our presence in the US and hold long term,” said Paillet. “Of course, that doesn't mean that we won't rotate assets and take advantage of cycles when there are advantages to be taken. But we're a long-term investor.”

One US property investment that Generali is seeking to replicate in the country is the Farragut Building in Washington, DC, which it acquired in September 2010 and subsequently renovated with energy efficiency upgrades.