Isabelle Scemama is not a woman who suffers fools lightly, but then you don’t become a senior person in the European real estate industry by skirting round issues.
Speaking from her office in Paris, where the Frenchwoman is based, she briskly dismisses concern about the global economy, preferring to talk about opportunities for investment. In February, she was appointed chief executive of Axa Investment Managers’s real assets division – the part of the multinational insurance firm that invests in property. It is the largest real estate fund and asset manager in Europe, with more than €70bn of assets under management across 24 countries.
Scemama has been in the industry for 19 years, having previously worked in financing at French bank BNP Paribas, before joining Axa Investment Management in 2001. She is credited with building Axa’s real estate lending platform, and helped a move towards buying infrastructure too.
Canary Wharf, as viewed from Greenwich
Her rise to the top of the division in global real estate, and in an industry that still has a reputation as a boys’ club, is no mean feat. But she is far more keen to talk about investing across Europe than her personal position, explaining that, even in uncertain times, there are deals to be done.
Despite fears that the London property market might slow after the European Union referendum result, she says the company still sees a great deal of resilience in the city.
“When we are looking at the real estate market in the UK and the rest of Europe we are cautious,” she admits. “I don’t know if we’ve had the peak of the cycle yet, but we are certainly not at the bottom of the cycle.” Because the market could be nearing the top, the firm is keen to buy up buildings to provide it with income, rather than betting that they will grow in value, she explains, adding that it has to consider the appetite for risk of the capital under its control.
London still remains an attractive prospect, she explains: “Of course we pay attention to what’s happened and we consider that Brexit could introduce volatility,” she says. “Nevertheless, in the long run we are confident that the market and London in particular will remain a key city, and this volatility may also throw up opportunities.”
That volatility has begun to seep in, she observes. “We’ve seen some adjustment in pricing or maybe an impact on transaction volumes,” she acknowledges, “but London will remain attractive.”
Indeed, just last week the firm bought another major office block in Kensington, called the Warwick Building, for £56.6m. It is perhaps not Axa’s usual bag: the building is a Grade II-listed former warehouse, which is likely to attract tenants slightly more diverse than the financial services in many of its office buildings.
This, Scemama adds, is the direction the company sees London going in, particularly if the terms of a so-called “hard Brexit” affect the ability of banks to trade out of the City.
A workman stands in a cherry picker on the building site for 22 Bishopsgate
“What we observe is that the London market, and particularly the east part of London, is attracting the tech sector,” she adds. “So it is within London to adapt and readjust and attract a different type of tenant and recover from challenging situations, and this gives us a lot of comfort.”
She points out that good quality buildings will attract good tenants, regardless of whether they have previously been associated with a particular industry. That is perhaps just as well: in October, Axa announced it would be pushing ahead with developing the tallest tower in the City of London, known as 22 Bishopsgate.
The tower has a chequered history: a Saudi-backed skyscraper called the Pinnacle was planned for the site in 2008. However, the scheme was scrapped in 2012 due to a lack of funding and tenant, leaving just the foundations as a reminder.
An artist’s impression of the planned tower
Axa bought the site in 2015 and at 1.4m sq ft, it is now the largest project under construction in the City, and will house 12,000 workers. She says new buildings with up-to-date facilities which are demanded by modern companies will do well. “We are confident that this building will attract good tenants and it will find its market.”
Does she think that as other European cities make a play for some of London’s business, the city could suffer?
“The only city that can compete with London in Europe is Paris, in terms of size, in terms of liquidity and in terms of the quality of infrastructure,” she explains, dismissing the likes of Frankfurt and Dublin.
“They are not exactly at the level of Paris,” she says, with a French shrug. Axa’s scope is far wider than the UK: the firm made a major push into Asia Pacific last year by buying Eureka Funds Management, an independent real estate fund and investment management firm in Sydney.
Can Paris lure businesses away from London?
Scemama says this is part of her bid to globalise the business, and that further acquisitions could be on the cards. After her years in the industry what is she seeing now that is different?
“Real estate is now definitely part of the asset allocation of clients, it’s not just the alternative return that it was, considered only by a few investors,” she explains, adding that investors have looked to diversify, particularly in a lower interest rate environment.
She speaks about the growth of her firm in language that implies that the sky is the limit. And with the tallest tower in the City soon to be under her belt, perhaps it is.