08 December 2014

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Dutch institutional property investment manager Bouwinvest has acquired a healthcare residence in the city of Haarlem in North Holland in a second sale-and-leaseback deal for its recently established Healthcare Fund. The purchase from healthcare provider DS Verzorgd Wonen involved the simultaneous signing of a 20-year rental agreement for the asset with the vendor. The profile of the property, which accommodates elderly people unable to live independently and requiring extensive care support, is in line with the investment strategy of the Healthcare Fund.

Residence Hildebrand is a small-scale residential complex in the upper-income segment of the Dutch healthcare market and comprises of 28 living units with attached facilities located in a well-presented villa in Haarlem’s Fonteinlaan. The healthcare residence home has been in operation since February this year and is already nearly fully let following strong demand for its accommodation.

Bouwinvest sees the comprehensive restructuring in the Dutch healthcare sector and the demographic trend of a rapidly ageing population as presenting a compelling real estate investment opportunity. The manager is targeting €300 million in investments in the sector in coming years on behalf of the Dutch construction workers pension fund and is focusing on the residential and intramural care segments where its research has identified the most attractive risk/return profiles. A small portion of the Healthcare Fund’s portfolio will include private medical facilities within the ‘cure’ segment of the market.

Erwin Drenth, Manager Real Estate at Bouwinvest said: ”Now that healthcare services are shifting from the government towards consumers, we expect the demand for high quality healthcare and the housing facilitating it will increase substantially, because people will want more value for their money. We are on the threshold of a new era, in which ‘one size fits all’ for elderly isn’t the norm anymore. Consumers will, depending on their lifestyle and needs, have different demands for their care and housing.”

Dick van Hal, CEO at Bouwinvest: ”The characteristics of this asset class are well matched to the long-term liabilities of pension funds. The elderly nature of the tenants in healthcare accommodation provides a natural “ageing hedge” for the longevity risk inherent in pension portfolios and the indexation of rents matches the inflation exposure. At the same time pension funds can “close the circle” in meeting their social responsibilities to Dutch society and many of their own retirement plan members without sacrificing their fiduciary duty to maximise risk-adjusted investment returns.”