Geneva, June 15th 2021
AB Alternative SICAV-SIF, European Real Estate Sub-Fund, an open-ended Luxembourg fund investing in commercial real estate in continental Europe, has just released its Q1 2021 performance figures, completing a solid five years of track record.
The Portfolio Management team, at Arab Bank (Switzerland) Ltd, is proud to share this important milestone with its investors. Since its launch, in 2016, the fund size is now standing at €236.9m and has delivered to its investors an impressive 9.02% annualised net IRR, while maintaining a quarterly dividend distribution of c. 4.5% p.a. on initial contributed capital at fund inception. These impressive results have been achieved in total control of the risk by focusing on the low/medium risk Core/Core+ segment, limiting the financial leverage (loan to value) to below 50% and selecting financially sound and predominantly international tenants.
Over the years, the team has consciously built a resilient, coherent and diversified portfolio along its core investment themes based on logistics linked to the structural e-commerce transition from traditional retail sales, and, in a lower proportion, in offices located in key dynamic secondary cities in continental Europe.
Our focus on logistics since the inception of the fund is now paying off, as we notice a strong acceleration of e-commerce retail sales in Western Europe (incl. the UK), which has leaped up to 26.3% in 2020 compared to c. 19% in 2019 (source: emarketer 2021 global e-commerce report). This steady market trend pushes up the values of our logistics assets and the overall portfolio, then eventually increasing the net asset value of the fund and its underlying shares.
These outstanding returns demonstrate the fund strong resilience to the covid crisis, despite a challenging economic environment. The real estate team now turns its focus on the next five years and emphasizes the fact that our portfolio is perfectly aligned with our main investment themes: e-commerce transition and asset located in dynamic cities.