French asset manager Perial Asset Management will seek to raise its exposure to alternative living asset classes such as nursing homes and student housing with new European investments as part of a diversification strategy, according to chief investment officer Stéphane Collange.
Perial AM, which manages €5 bn of assets mostly consisting of offices in France, started focusing on the living sector in November last year with the launch of PF Hospitalité Europe, a new fund dedicated to nursing homes, student housing and healthcare assets across the continent.
The fund launch is only the start of a wider diversification strategy envisaged by the group, Collange told PropertyEU in an interview. ‘We are looking to diversify the portfolio with other asset classes which are less cyclical and less exposed to economic and sanitary shocks,’ Collange said. The decision is driven by long-term demographic trends and the structural under-supply of some of these markets, he added.
The company will continue to invest in offices, provided these are centrally located, environmentally sustainable and flexible in their offering. Collange: ‘In the light of the trends of remote working and new office uses, we have adapted our investment criteria in order to better suit the changing needs of office users. To that end, we focus primarily on buildings characterised by their centrality within the main European cities, flexibility allowing mixed uses, amenities within the building or its immediate environment and energy efficiency. We need to look forward at the future use of real estate, and in this sense we reckon we should start focusing on living assets which offer resilient and sustainable performance.’
Perial AM’s plans are to enter several new European markets this year, with the group currently actively sourcing opportunities in Ireland, Portugal, Poland and the Baltics.
Perial AM has recently bought two assets in Spain and the Netherlands for PF Hospitalité Europe and is currently in due diligence on two other properties. Gaining access to ‘alternative’ assets is a challenge, Collange conceded. ‘These are smaller sectors with little supply so we are faced with very much competition in our domestic market. Our strategy for 2021 is therefore to extend the scope of our geographic focus to new countries in Europe. We hope to enter Ireland, Portugal, CEE as well as the Nordics and the Baltics this year. These asset classes offer an opportunity for our shareholders to invest their savings usefully, while benefiting from long term performance and the stability provided by the acyclical nature of these asset classes,’ he added.
Collange said that travel restrictions made foreign investment more complicated but was confident the company would be able to make safe and sound investments. ‘We study the market and are constantly in talks with lawyers and tax advisors. We carry out a complete analysis and we only invest once we have a clear view on how the market works.’
In particular the group is looking to partner with a developer or an operator on a long term basis to gain access to properties at an early stage as well as to larger portfolios. ‘This is interesting because it would allow us to have a regular supply,’ Collange said. This type of partnerships are currently being pursued in all three sectors, care homes, student housing and healthcare. ‘Ideally we would like to launch separate dedicated funds for all these asset classes.’ Projects for new dedicated institutional funds are under investigation, with possible operator-investor-developer partnerships.
Since the start of Perial Asset Management’s European expansion in 2016, the company has built up a €930 mln portfolio abroad, out of a total of €5 bn of assets under management. Perial MA’s funds are currently present in six countries (France, Germany, Netherlands, Spain, Italy and Belgium).