ESG is not an option for us – it’s a prerequisite in all we do
AM ALPHA has been active in the French market for over a decade. In an interview, Etienne Marcot, AM ALPHA's Head of France, explains the unique features of France as a real estate location and AM ALPHA's investment approach.
Etienne, can you give us a brief overview of AM ALPHA's activities in France?
Sure! AM ALPHA has been active in the French market for over a decade, leveraging the dynamic and stable environment of the French real estate sector. Our strategic acquisitions span from high-profile office buildings in Paris to hospitality properties in cities like Lille. Notably, our acquisitions such as the Moxy by Marriott in Lille and significant office spaces like those at Rue de la Banque illustrate our commitment to growth and excellence in this region.
Speaking of strategic acquisitions, how does AM ALPHA identify and capitalize on opportunities in such a competitive market as France?
Our approach is quite multifaceted. We focus on off-market transactions, which allows us to secure assets at competitive prices. For instance, the acquisition of the 20 Rue de la Banque property was an off-market deal that involved transforming a historic Haussmann building into modern office spaces. We're always on the lookout for properties that not only promise returns but also align with our sustainability goals, as seen with our ESG-certified properties.
On the topic of sustainability, how significant is the ESG criteria in your investment strategy?
ESG is not just an option for us. It’s a fixed prerequisite for all our investments. France's regulatory environment, especially with laws like Décret Tertiaire, compels us to prioritize sustainability. Our projects, like the Îlot B in Bordeaux, are not only commercially viable but also environmentally responsible, featuring solar panels, photovoltaic systems, and HQE certifications.
With such an emphasis on sustainability, how does AM ALPHA ensure these properties perform economically as well?
We integrate sustainability into our asset's lifecycle, from acquisition through management to eventual sale. This approach not only enhances the asset's value but also attracts tenants and investors who are increasingly ESG-conscious. For example, our property at Rue de Lille, renovated in 2016, has been fully let to a company that values the high-quality, sustainable redesign.
So AM ALPHA also plays a role in the urban regeneration developments in France?
AM ALPHA actively participates in urban regeneration projects across France, particularly in areas poised for significant urban renewal. We collaborate with local authorities and other stakeholders to ensure that our projects not only align with but also contribute to the broader developmental goals of the community. Our involvement in Bordeaux in the revitalization of the Bastide Niel eco-district showcases our commitment to sustainable urban development. These projects often involve transforming underutilized or derelict areas into vibrant, mixed-use spaces that foster community and economic growth.
Turning towards the broader market, how does AM ALPHA view the future of real estate investment in France, particularly in Paris?
Paris remains a linchpin in our strategy due to its robust office market and high-quality real estate stock. Despite high competition, the city's global appeal and continued infrastructure developments offer substantial growth opportunities. Moreover, we're looking at other French cities like Lyon and Marseille, which provide good alternatives with potentially higher yields.
How do fluctuating market conditions in France pay into AM ALPHA’s investment strategy?
AM ALPHA is highly responsive to changes in the French real estate market. We adapt our strategies based on a thorough analysis of economic trends, real estate cycles, and regulatory changes. Our local expertise allows us to anticipate market movements and adjust our portfolio accordingly. For instance, during periods of economic downturn, we might focus on value-add and opportunistic investments, which provide higher risk-adjusted returns. Conversely, in a more stable market, we emphasize core and core-plus investments in prime locations.
Etienne, how has the pandemic changed real estate and investment business in France?
The pandemic brought along many challenges, particularly in the hospitality sector. However, it also opened up opportunities to acquire assets at favourable terms. Our purchase of the Moxy by Marriott during the pandemic is a good example – and also a proof of our ability to act swiftly and capitalize on such situations. Now that the market rebounds, these assets are performing exceptionally well.
Before we conclude, could you share a bit about AM ALPHA’s future plans in France?
Looking ahead, we are focused on expanding our portfolio with an emphasis on innovation and sustainability. This includes not only enhancing our existing properties but also seeking new opportunities in both the office and residential sectors. Our goal is to blend our financial objectives with our commitment to environmental stewardship, creating spaces that are not only profitable but also beneficial for communities.
