Catalyzes the epimerization of L-Ala-D-Glu to L-Ala-L-Glu and has probably a role in the metabolism of the murein peptide, of which L-Ala-D-Glu is a component. Is also able to catalyze the reverse reaction and the epimerization of a broad range of other dipeptides; is most efficient with L-Ala-D/L-Phe, L-Ala-D/L-Tyr, and L-Ala-D/L-His. L-alanyl-L-glutamate = L-alanyl-D-glutamate Binds 1 Mg(2+) ion per subunit. Cell wall degradation; peptidoglycan degradation. Belongs to the mandelate racemase/muconate lactonizing enzyme family.