Geneva, May 5th 2022
AB Alternative SICAV-SIF European Real Estate Fund (“the fund”), an open-ended Luxembourg based fund that invests in commercial real estate in Western Europe, has just released its Q4 2021 results after its annual audit.
The fund continues its strong performance with, an above target, net annualized IRR of 8.71% in Q4 2021, translating into a total return for the full year 2021 of 10.5-11.5% depending on share class. The Gross Asset Value (“GAV”) of the fund stands at €273 million and the Net Asset Value (“NAV”) at €173 million. The weighted average lease term (WALT) of the portfolio stands at an impressive 6.26 years, due to selective lease renewals, and careful asset management performed throughout 2021.
The portfolio management focus still lies on the highly sought-after logistics sector with a particular demand for last-mile logistic assets, but also on select offices that are well located in secondary cities. The portfolio fair market value has increased by €8.31 million to reach €219 million during the last quarter of 2021, reflecting an annualized 9.46% growth, despite the current economic turmoil and uncertainty.
On the transaction side, we are targeting an acquisition of a Life Sciences building for an amount of c. €33 million in the neighborhood of Brussels, Belgium, for which we expect to complete before summer 2022. We are also in the process of disposing one of our Dutch assets located on the outskirts of Amsterdam and anticipate to close this sale before summer.
We still expect the logistics sector to remain a bright spot in the property markets, and analysts expect an even higher demand over the next ten years, boosted by continuing growth of e-commerce sales. E-commerce logistics market is projected to grow at a CAGR of 17.8% by 2032 according to a Future Market Insights’ report. We also see some good opportunities in the office market in dynamic cities, where urbanization and economic growth are two key factors.
The intention of the real estate team remains to expand the portfolio through further investments in logistic assets linked to e-commerce, and in select offices in dynamic cities, as well as continuing its hands-on management approach to yield positive results to its investors.
Daniel Deléchat, Head of Asset Management at Arab Bank (Switzerland) Ltd, co-founder of the fund in 2015, comments on these excellent performance figures: “we are thrilled to continue our activities in both logistics and offices sectors. The current crisis has revealed a strong resilience of our portfolio and we intend to reinforce our presence in our key markets through additional acquisitions in 2022. As part of our strategy, we will to continue to focus on relatively smaller sized assets, where institutional demand remains lower, albeit in excellent locations.”