AXA Real Estate Investment Managers has recently launched the UK Long Lease Property Fund, aiming to provide UK institutional investors, pension schemes and investment consultants with a new property based, liability matching solution that generates long and secure income streams.
The newly launched open-ended fund will offer investors, particularly pension funds, an opportunity of investing in a broadly diversified portfolio of UK long lease assets put together by AXA Real Estate, the leading real estate portfolio and asset manager in Europe with over 43 billion euros of assets currently under management. Investors in the fund will also benefit from AXA Real Estate’s extensive expertise and exposure to a wider variety of sectors through their dedicated Alternatives and Hotels Business Lines.
The Long Lease Property Fund will target sectors varying from traditional markets for long lease assets such as supermarkets, distribution centers or offices, to more alternative assets in the healthcare, social housing, student accommodation, hotels, leisure automotive and ground leases sectors.
The fund aims to maintain an average lease term of 20 years or more, with lease agreements based on inflation indexation or fixed rental uplifts. Employing this strategy is expected to lead to long term and stable income streams often with inflation indexation for institutional investors interested in investments with liability matching attributes. These particular traits of the newly launched fund make it ideal for pension schemes.
AXA Real Estate has already raised 125 million British pounds and plans on growing the fund to reach 1 billion pounds over the next five years.