Geneva, the 5th June 2019 – AB Alternative SICAV-SIF European Real Estate Fund, an open-ended Luxembourg based fund that invests in commercial real estate in Western Europe, achieved an annualized IRR of 11.61% in the first quarter of 2019 and distributed 4.48% p.a. (contributed capital) dividend for the same period. The portfolio is fully occupied with a weighted average lease term of 4.8 years, and generates a total rental income of €12.4 million in 2018. The Gross Asset Value (“GAV”) of the fund is €183 million and we intend to grow the fund to €500 million while maintaining a stable distribution level.
Daniel Deléchat, Head of Asset Management at Arab Bank (Switzerland) Ltd., comments on these excellent figures: “we are dedicated to the success of the fund, and intend to continue our investments in offices and logistics while benefiting from the structural changes linked to dynamic cities and the growth of e-commerce. We seek to acquire relatively smaller assets, where institutional demand is usually lower, allowing us to acquire better performing assets on a risk adjusted basis.”
Returns in both logistics and offices markets have been historically higher than in other real estate sectors in Europe, thanks to the growth of e-commerce (c. 14% growth year-on-year since 2008 in Europe). This situation is likely to continue in the coming 5 years, as e-commerce now represents around 16% of all logistics take-ups in Europe, and the required take-up of new logistics and distribution space in Western Europe is expected to be around 1.3m sqm every year by 2022 according to Colliers International. “Our strategy to make targeted investments in logistics and last-mile assets within big European hubs and prime tenants is paying off”, adds Mr. Deléchat.
The current portfolio consists of four office buildings and seven warehouses located in Germany, the Netherlands, Luxembourg and Italy: it is well balanced both by geography and asset class. Furthermore, the team is targeting the growing logistics market in Spain, a country that is witnessing a solid GDP growth that is above the EU average.
For more information:
Portfolio Manager and Global Distributor
Arab Bank (Switzerland) Ltd.
10-12 place de Longemalle
+41 (0)22 715 12 11