Axa chief Pierre Vaquier says that given the lack of property lending from banks, he’d like his company to give it a go.
“There’s a lot of attraction to this kind of a product from insurance companies,” said Pierre Vaquier, chief executive officer of Axa Real Estate Investment Managers. Senior loans, which take priority for repayments in the case of a default, yield 2 to 3.5 percentage points more than other debt and so provide a higher return.
Axa has already made 1 billion euros ($1.4 billion) of real-estate loans, which are managed by Paris-based Axa REIM on behalf of the insurance company and its clients. Axa has the capacity to lend 1.5 billion euros more, said Vaquier, whose company is the world’s second-largest property asset manager.
Europe’s banks have been forced by regulators to lend less money after amassing a record 970 billion euros in commercial property debt in a five-year lending spree that ended in mid- 2007. Lenders will sell, foreclose or write down more than 200 billion euros of loans from their balance sheets over the next decade, CB Richard Ellis Group Inc. estimates.