AXA Investment Managers – Real Assets has acquired a 958 hectare forest known as “Domaine de Saint Augustin” in the Allier and Cher departments, France, for EUR21.5 million from a private vendor.
The transaction has been undertaken on behalf of an AXA Insurance Company and brings AXA IM – Real Assets’ total forestry assets under management to circa EUR130 million, comprising circa 21,000 hectares.
The forest is located adjacent to the forest of Tronçais, which is renowned for producing some of the highest quality oak wood for planks and barrels, is well connected by roads and is in close proximity to a newly opened wood energy plant. The forest has good supportive infrastructure, which allows for efficient harvesting and management, as well as three lakes and forest management equipment and vehicles.
As part of AXA IM – Real Assets’ ongoing strategy to diversify and expand its clients’ forestry holdings, this acquisition increases the portfolio weighting of deciduous stock which is important to providing flexibility to benefit from fluctuations in demand for different types of wood, while maintaining annual revenues.
AXA IM – Real Assets now manages around 5,500 hectares of forest in Finland, and around 15,000 hectares in France, on behalf of its clients, equally shared between coniferous and deciduous, with the balance set aside for various leisure activities.
Forestry forms part of AXA IM – Real Assets’ EUR3 billion alternatives assets platform, which comprises healthcare facilities, hotels and data centres.
Christophe Lebrun (pictured), head of forest investment at AXA IM – Real Assets, says: “Following our forestry acquisitions in the Nordics last year on behalf of one of our client, this transaction is indicative of our strategy to diversify our clients’ European forestry portfolios both geographically and through types of tree, which is an important tool for benefitting from peaks in demand and the provision of steady and secure income returns. In addition, forestry is a low environmental impact investment, which has historically offered highly stable returns and long and short term outperformance compared to other asset classes.”
