The real estate market has seen great turbulence in recent years. Per Erikson, head of real estate at Swiss Life Asset Managers sat down to explain how the firm manages to not only find, but add value, into its transactions and holdings.

By Pete Carvill, Insurance Asset Risk

Insurance Asset Risk (IAR): Congratulations on winning 'Real Estate Manager of the Year'. How does it feel to pick up such an award?

Per Erikson (PE): We look at it as a recognition of all the hard work that our real estate team has put into this asset class. At the same time, because we're an asset manager originated from and remain linked to an insurer, it's particularly important for us to be acknowledged for our consistency and expertise in this asset class. So, yes—overall, we're very proud and happy!

IAR: What do you think set Swiss Life AM out this year?

PE: As mentioned at the Swiss Life Group's investor Day last December, we keep building on our strength: we combine needs of our balance sheet with those of third-party clients for the benefit of both. And we have decided to stick to our strategy and be active on the market on both the buy and the sell side, even if markets are undergoing some difficulties.

IAR: We've seen a lot about ESG in recent years. It was a hot topic at first, but now the winds of change seem to be blowing a little against it. I'm thinking about the US administration here. How does ESG now factor into your investment thinking?

PE: We integrate ESG into each part of the value chain. All of the properties in our direct portfolio are managed to an ESG standard. We want to create a measurable, real impact in reducing CO2 emissions across our directly held real estate portfolios. At our past investor days we committed to a reduction target and we have integrated this target into our plans.

IAR: We've mentioned the new US administration. You're obviously Europe-based, but you will no doubt be watching what goes on. How does ESG play out in Europe in the light of the US changing direction?

PE: This topic goes beyond the US administration change, but I think the focus does need to shift from finding the perfect regulation or building on regulatory requirements that make it difficult for companies to focus on decarbonising real estate. I don't believe in doubling down but rather in finding more pragmatic ways to tackle issues.

IAR: This seems like a good time to ask about Climatch. A large part of your entry was about Climatch. That will be a new word and concept to many. Could you tell me a little bit about it?

PE: Sure. Climatch is our Centre of Competence for the decarbonisation of our real-estate portfolio. As a company, we want to focus on sustainability and creating measurable impact—in real estate, that is decarbonisation. We wanted to make a business of it, and that's how Climatch was born as a separate company in 2021 in Switzerland. We do that by combining various knowledge sources and technologies and bring them together in this holistic view about energy as a service. By doing all this, we reaffirm our commitment to sustainability.

IAR: Can you give us an example of how this works in action?

PE: Absolutely. In Frankfurt—the big one, not the little one an hour from Berlin—we've got a large area that is called Frankfurt Westside. Before we began working with it, it was a defunct chemical factory. We have started to redevelop it and part of that process was to put a data centre there. We make sure that that centre has a supply of green energy and the heat that it produces is used to heat the rest of the 750,000 square-metre area.

IAR: And Climatch is solely utilised by Swiss Life?

PE: No. While the primary focus currently is on our own properties, Climatch is being made available for third party clients too. So far, we've had a lot of interest in Germany about Climatch's offerings.

IAR: And how does 2025 look to you?

PE: We're going to continue doing what we do. That's going to be focusing on achieving attractive returns. Our aim has always been to focus on generating consistent income rather than making short-term capital gains.

IAR: Are there any particular areas that you're going to focus on?

PE: We have the four Ls as our focus investment topics. That's living, logistics, light industrial, and life science and tech.

Of course, we also have offices. Despite the shifts in recent years, we strongly believe in the continued relevance of office spaces. We can see a lot of companies asking their employees to return to the office, but we're finding that the type of office has changed because people want something modern at a good location that gives employees a good experience.

We also see opportunities in attractive niches like health care, self-storage or even camping. It underlines our way of doing business—finding something where we can add value, then creating more value for our investors.