Making progress on our strategy - Alternatives

Ahead of our Full year results for 2022 on February 28 we’ve been looking back at the progress we’ve been making against our strategic priorities. With Alternatives a critical part of our client-led plans, here we spotlight some of the key developments delivered in this area over the last 12 months.

Real assets

With ever-increasing interest from investors in the alternatives area, 2022 has been a year packed with projects, new developments and exciting new partnerships.

One to garner headlines recently is our collaboration with John Lewis to deliver 1000 new homes in three build-to-rent schemes in London and the South East. This is a £500m multi-decade joint venture to bring to reality John Lewis’s plans to use its property assets to create much-needed homes for rent. The plan is to redevelop two Waitrose stores into new homes and improved stores and turn one vacant warehouse into housing. Creating affordable and sustainable housing ties to our target of reducing the carbon intensity of our assets by 50% by 2030 and our commitment to address the critical lack of quality rental accommodation in the UK.

Elsewhere, as part of our commitment to residential we invested €303m in France, with recent transactions including four senior housing projects, one multi-family, one student housing and one mixed residential-retail project. The average age of a building in the portfolio is about two years and the factors that continue to drive acquisitions in the fund are: affordability, accessibility and amenity.

Another headline-generating venture has been the launch of abrdn’s in-house Mys Student Living, a purpose-built student accommodation platform that aims to address the student housing shortage in both the UK and Europe and support the growing university age population. As universities in the UK and Europe continue to attract growing numbers of both domestic and foreign students, there are significant shortages in purpose-built student accommodation and existing properties are often not fit for purpose.

The aim of Mys is to offer a values-led proposition with strong ESG credentials to provide the best possible customer experience. In line with our sustainable values, Mys is aiming to achieve high social and environmental performance and will target B-corp status.

We are now one of the largest residential fund managers in Europe, with more than 200 residential properties across 11 countries. As a key part of our Alternatives franchise, which includes a diverse infrastructure portfolio, just one focus in the year ahead will be to build on the quality of our residential offerings and on their sustainability and energy efficiency.

Finally, to mark our achievements in sustainable real estate investing, the abrdn European Balanced Property Fund was awarded the highest 5 Star status in the 2022 Global Real Estate Sustainability Benchmark (GRESB), the largest global ESG benchmark for real estate and infrastructure investments.

The Fund has improved its GRESB ESG score year-on-year, resulting in its highest score this year, as well as achieving first place in its peer group. During 2022, the fund has made a number of acquisitions in the logistics, hotels and senior living sectors, after winning a total of €500m of new commitments from investors.