Geneva, May 11th 2021
AB Alternative SICAV-SIF European Real Estate Fund, an open-ended Luxembourg based fund, focusing on commercial real estate investments in continental Europe, has just released its 2020 annual audited financial statements.
Over the past year, the Fund has achieved an outstanding performance with a net annualized IRR of 9.02% while maintaining a quarterly paid dividend distribution above 4.5% annualised, on initial capital distribution since its launch in 2016. Further to this strong performance and new investor subscriptions, the fund’s Gross Asset Value (“GAV”) is now standing at €230 million.
The year 2020 was the most active pertaining to asset management activity. In Germany, the team successfully divested an office building in Wiesbaden, originally acquired in 2016, and realised a 32% net IRR. In Italy, a new last mile asset was acquired in Brescia, with Poste Italiane as a tenant. Furthermore, during the Covid crisis, we proudly assisted some of our key tenants, with the provision of rental free periods, in exchange for lease renewals, for periods between 5 and 10 years, as well as investing in further capex for other key long-term tenants. As a result of this intensive activity, the weighted average lease term (WALT) of the portfolio is now safely standing at more than 7 years. These lease renewals have also strongly contributed, in 2020, to a total portfolio value increase of c. €17.8m or 11% yoy despite a challenging economic environment.
Looking ahead, the portfolio management team remains focused on finding opportunities in the highly sought-after logistics sector. Within this sector, the team continues to witness a strong demand for last-mile logistic assets. This demand has been enhanced by the acceleration of e-commerce sales in Western Europe (incl. the UK), which has leaped up to 26.3% in 2020 (source: emarketer 2021 global e-commerce report) compared to c. 19% in 2019, mainly due to the boom of online sales because of several lockdowns and closure of shops.
Daniel Deléchat, Head of Asset Management at Arab Bank (Switzerland) Ltd. and co-founder of the fund, comments on these excellent performance figures: “We are very excited and proud to share these fantastic results with our investors. In 2021, our investment strategy, with a focus on logistics and specific office buildings in dynamic cities, continues to deliver the target returns, and we will pursue further acquisitions in the near future. The current crisis has revealed the strong resilience of our portfolio and we will continue our hard work to deliver a strong performance to our investors.”