Mapfre to Invest in Property due to Low Interest Rates
7 March 2019 – Expansión
Mapfre has announced its intention to invest in more real estate in light of the low interest rates in the global markets. The insurance group ended 2018 with real estate investments worth €2.9 billion, accounting for 4.3% of its total investments, having invested heavily in the renovation of its asset portfolio during the year.
Given the scarce supply and illiquidity of the real estate markets in Madrid and Barcelona, the firm has already created two companies headquartered in Luxembourg to invest in properties in Paris and Germany. It also plans to acquire real estate in Amsterdam, Brussels, Milan and Luxembourg.
Moreover, it has teamed up with the German real estate fund manager GLL, with whom it aims to invest up to €300 million in properties in some of the main European cities.
The objective of the insurance company is to generate returns of between 4% and 6% p.a. on a recurring basis and to diversify its portfolio.
The firm did also divest some properties last year, in Portugal, Chile and Palma de Mallorca, which together with the appreciation of other assets, resulted in net gains for the group of €47 million.
Most of Mapfre’s investment portfolio comprises public and corporate fixed income securities, which had balances of €49.3 billion and €8.9 billion, equivalent to 56% and 18% of its total portfolio, respectively, at year end 2018. Equities accounted for €2.4 billion (4.9%) and investment funds €1.3 billion (2.7%).
Original story: Expansión (by E. del Pozo)
Translation: Carmel Drake