The European portfolio is defensive in nature, has a strong core profile and is well-balanced in terms of sector allocation, geography and risk profile. The regional mandate has a strong focus on Western and Northern Europe, targeting primarily the traditional real estate sectors in the major urban regions. Our Europe portfolio will grow to around €1.7bn by 2022.
Bouwinvest manages three integrated property mandates (Asia-Pacific, North America and Europe) on behalf of bpfBOUW, the Dutch construction industry’s pension fund. The Europe portfolio consists of a mix of residential (including senior- and student housing), office, hotel, retail and logistics real estate. We manage investments primarily focused on the largest metropolitan areas in Germany, France, UK, Ireland, Spain and the Nordics.
It is our mission to enhance pension benefits in a responsible way by investing in sustainable real estate worldwide. Bouwinvest wants to make a direct contribution to the UN sustainability goals and we have set ourselves targets to do so. By 2025, 50% of our international real estate core portfolio (AuM) will consist of sustainable investments (GRESB 4 or 5-star rating) and by 2022, 50% of our European core property portfolio should be in sustainable investments.
We invest indirectly – via listed and non-listed real estate funds, joint ventures, co-investments and club deals – and make full use of the expertise and experience of our local operators. Most of our portfolio focuses on long-term investments that perform steadily and have a low risk profile.
The European property market
The European real estate market is characterised by high levels of sustainability, stability and transparency. Many occupier markets are healthy, with low vacancy rates and steady rental growth.
Positive GDP growth, low interest rates, urbanisation and an increase in the number of households are driving demand for new housing, particularly in the major cities. Student housing is another key sector, as is the ongoing growth in care-related real estate, and new residential concepts are constantly being developed.
The office market also continues to grow, with limited supply and vacancy levels below their long-term average. The retail sector, however, faces challenging conditions and needs to adjust to the changing retail environment and growth in online shopping. On the flipside, the growth in consumer spending and online retail are also driving demand for logistics facilities in urban areas.
'The migration of people, business activity and capital to the cities contributes to the strong performance of real estate in the major European metropoles'Robert Koot Director European Investments