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Global Investor 50 countdown: 5-1

The final entry in our six-part countdown of PERE's Global Investor 50, ranking the private real estate investment world’s top names.

The private real estate universe is growing, and PERE’s annual list of the biggest capital providers is growing with it. Our Global Investor 50 this year added 20 extra names to reflect the significant expansion and diversification of institutional investors in the private real estate space.

The ranking tracks discretionary equity committed to real estate through commingled funds, separate accounts, joint ventures, club vehicles and direct acquisitions. A full methodology – and the entire ranking itself – can be found here.

Now, we present the final five investors in countdown…

 

5

AXA

$35.03 billion

HQ: Paris

Scemama: replaced outgoing chief executive Pierre Vaquier in February

French insurance giant AXA rose one place in the ranking this year, committing an extra $2.6 billion of real estate compared with 2016.

While last year’s major purchase was the €800 million Tour First office building in Paris, the firm’s primary outlay in 2017 was the €1 billion May acquisition of Gramercy’s European logistics portfolio, which saw AXA’s in-house management division, AXA Investment Managers – Real Assets, outbid Invesco to secure the assets. Capital for the purchase was split between balance sheet and its core fund, which has raised around €800 million to date. AXA had invested in logistics before the global financial crisis but has deemed the sector too expensive since then. However, with European logistics assets proving immensely popular with investors over the last 12 months, following the sales of Logicor to CIC for €12.25 billion, P3 to GIC for €2.4 billion and Gazeley to GLP for €2.8 billion, the firm evidently decided to join the fray.

AXA has also expanded its reach in the Asia-Pacific region following the purchase of an office building in Brisbane via its newly-acquired Sydney-based business Eureka Fund Management, which manages $3.7 billion of assets.

The firm also had to contend with a trio of high-profile departures which saw chief executive Pierre Vaquier, chief investment officer Dennis Lopez and global head of asset management and transactions Anne Kavanagh all leave. Isabelle Scemama was appointed as Vaquier’s replacement in February.

 

4

Allianz

$40.78 billion

HQ: Munich


Icon Vienna: an Allianz development

When PERE sat down with François Trausch, chief executive of Allianz Real Estate, this time last year, he had ambitious asset under management targets for real estate. He said he planned to grow the business by around 25 percent by 2020.

Trausch and his team are well on their way to completing their lofty goal, and Allianz now has $40.78 billion committed to real estate.

Within Europe, the insurance giant wrote sizeable checks this year, such as for a Vienna office development. The transaction figure for The Icon Vienna complex is understood to be more than €500 million. The development, which offers around 900,000 square feet of prime office space, includes three separate towers and is due for completion in the second quarter of 2018.

In the US, Allianz partnered with Columbia Property Trust, a New York-based real estate investment trust, to invest in core offices. The pair seeded their joint venture with three buildings that have a total value of $1.26 billion.

The investor’s Asia exposure, where historically Allianz’s activity was relatively modest, also saw an uptick this year. Following a strategy to invest via funds, before taking on more direct exposure, the insurer approved a $100 million commitment to the e-Shang Redwood’s $1 billion-Redwood Japan Logistics Fund II in September.

Allianz is well on its way to meeting its aggressive allocation target and cementing itself in the upper echelon of the PERE Global Investor 50 ranking.

 

3

Qatar Investment Authority

$42.18 billion

HQ: Doha

Asia Square Tower 1: the Grade A asset was QIA’s highlight deal in the last 12 months

The past 12 months have been a mixed affair for the Middle Eastern sovereign wealth fund, with some notable outlays toward the end of 2016 and far fewer this year. It achieved its biggest feat when it acquired Asia Square Tower 1, New York asset manager BlackRock’s landmark Singapore asset, for approximately S$3.4 billion ($2.5 billion; €2.2 billion). At the time, it was the largest single-asset property transaction in Asia-Pacific. QIA also appears to have struck a good deal pricewise – it paid around S$2,720 per square foot for the Grade A tower, while BlackRock originally intended to sell it for S$3,638 per square foot, as PERE reported.

Elsewhere within Asia, QIA committed $250 million, via its subsidiary Qatar Holding, to investment manager ArthVeda Fund Management’s affordable housing fund, which is being invested in low and middle-income residential properties in India. Meanwhile, in terms of deployment from existing partnerships, the Qatari investor, together with Singaporean property conglomerate CapitaLand, actively invested from their $600 million global serviced residences fund. Recent acquisitions include a £52 million ($68.47 million; €58.24 million) investment in an apartment and hotel building in London in April and the JV’s debut deal in Australia with the $54 million purchase of a serviced residence building in Melbourne in July.

But since the summer, QIA’s home country has also been in the news because of its diplomatic crisis with some of the other members in the Gulf Cooperation Council, including Saudi Arabia and the UAE. The market is already speculating as to the effect this rift will have on QIA’s overseas real estate investment program.

 

2

Stichting Pensioenfonds ABP/APG

$45.11 billion

HQ: Heerlen

Kanters: partnering with best-in-class managers is APG’s preferred route to investing at scale

Stichting Pensioenfonds ABP, which invests in real estate via its wholly-owned APG Asset Management, has increased its commitment to real estate by around $2 billion compared with last year, when it registered $43.22 billion of investment in the asset class. In doing so, the Dutch pension fund remains Europe’s largest real estate investor, holding off a major charge from Allianz, and the second overall globally.

The Dutch pension fund’s focus last year was a continuation of its preferred investment structure, namely forming joint ventures with some of the real estate industry’s most recognizable firms. This was highlighted in October last year when it partnered with TH Real Estate to make a 75 percent commitment to the €944 million Edinburgh St James shopping center. Led by head of global real estate Patrick Kanters, APG also continued its geographical diversification process with the launch of a $450 million platform to invest in India’s retail sector in December, and a $250 million commitment to GTIS Partners’ $750 million fund targeting Brazilian office and logistics assets in August. The pension manager’s global real estate split between Europe, Asia-Pacific and the Americas is 45 percent, 21 percent and 35 percent, respectively, while its allocation to real estate has remained at 10 percent since the end of the global financial crisis.

On the personnel front, the investor suffered the departure of two senior executives over the last six months: chief executive Eduard van Gelderen resigned in May followed by head of Asia-Pacific real estate investments Sachin Doshi a month later.

 

1

Abu Dhabi Investment Authority

$46.94 billion

HQ: Abu Dhabi


Macau: ADIA took a bet on the resort city with a retail asset buy

The pre-eminent Middle Eastern sovereign wealth fund, Abu Dhabi Investment Authority again tops the ranking.

Following the $2.4 billion purchase of a 50 percent stake in three Hong Kong hotels in 2015 – its biggest deal in the region so far – ADIA has continued to deepen its commitment to Asia-Pacific, marked by the opening of a Hong Kong office last year to identify new opportunities in China. In June 2016, the state fund, via one of its subsidiaries, acquired a 50 percent stake in a 655,000-square-foot shopping mall in Macau for HK$3.1 billion ($400 million; €340 million) from Shun Tak Holdings.

It also continued its pursuit of deals in India – a key strategic market alongside China because of the two nations’ long-term growth prospects, according to ADIA. The investor reportedly tied up with Lake Shore India to invest in retail properties in the country at the beginning of this year. More India assets are on the cards and, according to a report in the Times of India, ADIA was also understood to be bidding in partnership with the real estate developer Shapoorji Pallonji for a business park asset, in a deal estimated at around
$250 million.

ADIA has also backed emerging markets outside of Asia in recent years; in 2016 it partnered with GP Investments to acquire a 70 percent controlling stake in the Brazilian publicly traded real estate company BR Properties, which owns a large portfolio of office assets in the key markets of Sao Paulo and Rio de Janeiro.

The investor remains a force within developed property markets, too, and its European deals included an office development in La Défense, the dominant market in Paris.

Yet, despite maintaining its long-term real estate allocation range of 5-10 percent, the main sovereign wealth fund of the United Arab Emirates admitted in its latest annual report to having slowed its pace of real estate acquisitions due to maturing property cycles. In fact, it highlighted its focus on selling assets and refinancing deals. Key examples include the $200 million sale of 2000 McKinney Avenue in Dallas in August and a £145 million ($190 million; €161 million) sale of a London office property at the start of the year.

Still, it will take an enormous effort from its rivals to knock ADIA from atop PERE’s ranking of the globe’s largest real estate investors.

For PERE Investor 50 profiles 10-6, click here.

For PERE Investor 50 profiles 19-11, click here

For PERE Investor 50 profiles 29-20, click here.

For PERE Investor 50 profiles 39-30, click here.

For PERE Investor 50 profiles 50-40, click here.