AXA Funding Managers updates
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One of many world’s largest asset managers is making ready to spend virtually €2bn on specialist laboratory area and workplaces in Europe, an indication of the fast-growing institutional curiosity within the life science sector.
Life science properties are among the many hottest belongings for actual property traders for the time being. Comparatively well-established in North America, the sector is growing quickly in Europe, with the UK a specific goal.
Axa IM Alts, a division of French fund group Axa Funding Managers, has raised €1.9bn, which might be invested by way of Kadans Science Accomplice, a science park developer that Axa purchased final yr.
“The life sciences story might be probably the most thrilling one for actual property funding in Europe proper now,” stated Timothé Rauly, world head of fund administration at AXA IM Alts.
Half of the funds raised might be spent on growing new belongings, with the Netherlands, UK, Germany and France doubtless targets. The opposite half will go to upgrading or repurposing present Kadans belongings.
Establishments are piling into the sector within the hope that the elevated give attention to science and innovation brought on by the pandemic will propel development.
Properties fluctuate from normal workplaces to classy lab area, and placement is a key determinant of worth.
The “golden triangle” between Cambridge, Oxford and London, which instructions a premium due to its proximity to prime universities and analysis centres such because the Crick Institute in King’s Cross, has been a goal for traders in current months.
Magdalen Faculty is testing investor urge for food within the Oxford Science Park. The faculty is aiming to promote its stake for about £100m, in line with individuals with information of the deal, a sevenfold improve in worth because it purchased the share 5 years in the past.
“Staying inside the present European clusters is kind of necessary and in our view the place you’ll profit from rental development,” stated Rauly. The golden triangle is “positively a location we are going to proceed seeking to spend money on,” he added.
Earlier than the pandemic, traders had been drawn to the sector by the relative safety of earnings it supplied, stated Steven Lang, who focuses on life sciences as a part of Savills’ business property analysis group.
Transactions have elevated in current months as traders transfer away from the sectors hardest hit by coronavirus, corresponding to retail and hospitality, and into areas they believe will flourish post-pandemic: scholar housing, logistics, retirement houses and life sciences.
Blackstone and Brookfield, each of which personal substantial life sciences portfolios, have been rising their funding within the sector over the previous 12 months.
“Covid is only a catalyst . . . a complete technology now needs to be like Chris Whitty [the chief medical officer for England]. There’s infinite demand on this topic space,” stated Lang.