AXA Real Estate Investment Managers has made the first acquisitions on behalf of the recently launched UK Long Lease Property Fund, with the purchase of two supermarkets for around GBP38m in aggregate.
The fund has acquired a supermarket let to Waitrose on the High Street in Sevenoaks, Kent, for GBP11.5m, and a 56,800 sq ft supermarket let to Tesco in Mickleover, Derby, for GBP26.3m.
The acquisitions, which come shortly after AXA Real Estate’s launch of the new, open-ended UK Long Lease Property Fund, having raised an initial GBP125m, are in line with fund’s strategy of building a core portfolio of UK long lease assets, with a focus on strong property fundamentals, by targeting investments across a range of sectors from traditional to more alternative assets. This strategy is expected to generate long term, stable income streams often with inflation indexation for institutional investors that are looking for investments with liability matching attributes, in particular pension schemes. AXA Real Estate is targeting a total fund size of around GBP1bn in five years.
John Osborn, fund manager – UK Long Lease Property Fund at AXA Real Estate, says: “To be able to announce the completion of two high quality acquisitions so shortly after the launch of the new fund demonstrates AXA Real Estate’s ability to put its extensive transaction network in the UK to effective use in sourcing suitable investment opportunities for its clients. Both of the assets we have acquired fit precisely into the fund’s strategy of investing in properties with strong property fundamentals that are capable of generating secure, long term income streams with rental uplifts.
“We have a strong pipeline of suitable investment opportunities across a broad range of sectors which we are currently assessing, while, in parallel, we continue to expand the fund’s investor base.”