Italian insurance giant Generali Group has made a €500 mln commitment to launch Axis Retail Partners, a new real estate boutique focusing on shopping centre investments.
Former CBRE Global Investors head of retail EMEA Florencio Beccar is CEO and co-founder of the new business, with retail veteran Toby Smith, former portfolio manager at CBRE Global Investors European shopping centre fund, acting as chief investment officer.
Generali will hold a controlling stake of 51% in Axis through Generali Investments Holding, with Madrid-based Beccar and Smith holding the remaining shares.
Generali will initially invest €500 mln into the fund, which will be open to third party clients as well. It plans to invest in high quality, core, and dominant shopping centres across continental Europe, with an annual target total return of 7%.
A first dedicated fund – Generali Shopping Centre Fund, whose portfolio management will be delegated to Generali Real Estate – is expected to be launched in the second quarter of 2019, once authorisations have been obtained. Going forward, Axis Retail Partners will advise Generali Real Estate on the investment selection and asset management of the fund.
Generali said that its decision to launch the fund was driven by the belief that the continental European shopping centre sector continues to be' marked by solid fundamentals and offers an interesting entry point due to the current market juncture'. The firm added that it also required a 'deep industry knowledge and specific skills to keep risks under control'.
Over the last ten years, shopping centre investments have accounted for an annual average of around €20 bn within the retail real estate space in Europe, according to Generali. However, changing fundamentals and the impact of e-commerce have altered the outlook for many retail focused investors in recent months, spooked by rising distress in key markets.