Primonial REIM is accelerating its expansion in the European residential real estate sector, in line with its strategic plan that seeks to expand its investment universe to the whole Euro zone whilst at the same time consolidating its positions in France.
Thanks to targeted investments, Primonial REIM is aiming to increase its residential asset allocation from 6% to 20% of its real estate portfolio, whilst maintaining its overall target of €20 billion in assets under management, across all asset classes, within three years.
RESIDENTIAL REAL ESTATE: A STRONG MARKET ON A EUROPEAN SCALE
The residential market benefits from favourable economic and structural factors. Growing urbanisation and the movement of people are creating strong rental demand in the most attractive European cities. In such regions, where land is scarce, there is a shortage of housing, helping drive rents and real estate prices upwards.
Primonial REIM has created an analysis model for a set of residential markets looking at their fundamentals, position in the real estate cycle and their potential to gain value over the long term. This has produced a ranking of European cities, with projections of potential growth over the next few years for each of them. Primonial REIM’s ‘Euro City Ranking’ constitutes a decision-support toolkit for the group’s teams, helping them focus residential investment on the areas that Primonial REIM believes offer the strongest prospects.
Grégory Frapet, Primonial REIM’s Chairman, noted: “In just two years we have become one of the leading managers of healthcare real estate in the Euro zone. We believe that there are considerable opportunities in the residential real estate market in this region and our ambition is to become a leading player in this segment as well. Over the past two years we have created a dedicated team of experts in this asset class, who are able to pick the best opportunities in the market.”
SUBSTANTIAL INVESTMENT MADE AND MORE STILL TO COME (Past investment is not indicative of future investment performance)
Over the past two years, Primonial REIM has made substantial investments in residential real estate, most notably the acquisition of a €400 million* portfolio in Marseille, 2017’s largest residential real estate deal**.
Other acquisitions in France and elsewhere in the Euro zone are now being considered and could be announced later this year.
* Excluding transfer taxes; 140 assets, mainly mixed, Haussmann-era residential buildings with ground-floor retail and office space.
**Source CFNEWS January 2018
Source : Company