AXA Investment Managers – Real Assets announces that it has created a long term strategic partnership with in’li, a leading operator of affordable housing in Île-de-France and a subsidiary of French social housing giant Action Logement, with the acquisition, on behalf of clients, of a 75% stake in a newly created property company, which currently comprises a portfolio of c. 9,800 residential units in the greater Paris region. Through the partnership, in’li and AXA IM – Real Assets will also seek to develop a further 1,500 new units per year.
The initial portfolio is diversified across the whole of Île-de-France, Europe’s largest city area with a population of over 12 million people, and totals c. 565,000 sqm across 143 assets. It consists of 61 existing income producing properties dedicated to affordable housing and comprising c. 5,800 units which are fully occupied, as well as a further c. 4,000 units across 82 purpose-built assets that are currently under construction and are being forward funded by the venture as part of the transaction.
In 2014, the French government created affordable housing regulation (logement intermédiaire) with the objective of attracting private sector finance to help address the shortage of good quality and affordable rental accommodation for the middle classes, who do not qualify for social housing but are priced out of the private rental market. It is focused on supply-constrained areas, particularly in the greater Paris region, and generally located in or around existing or potential new areas of employment to make locations or regions more attractive to employers, thereby facilitating job mobility.
Access to regulated affordable housing is means-tested according to income ceilings, and offers rents set at between 10-20% below market rate. At the same time the rental leases are linked to the IRL consumer price index providing highly visible and defensive income returns which are well suited to matching the long-term liabilities of institutional investors such as pension funds or insurance companies.
As part of the partnership, in’li, which retains a 25% interest in the property company thus created, will source new forward funding development opportunities as well as undertake project management, property management and leasing for the venture through its property management subsidiary in’li Property Management, while AXA IM – Real Assets will be responsible for asset and fund management.
The acquisition forms part of AXA IM – Real Assets’ wider long-term strategy, on behalf of clients, to invest into residential asset classes which it believes are supported by strong demographic drivers and adds to its c. €22 billion portfolio of residential assets under management spread across 15 countries .
Source : Joint release