19 May 2014
Timing is right for residential investments in the Netherlands with increasing housing shortage and labour mobility fuelling demand for rental homes. Liberalisation in the Dutch rental market also boosts long-term prospects for institutional investors’ European mandates.
“The advantage of the Netherlands is that it’s an investable area with growth opportunities,” says Dick van Hal, CEO of Bouwinvest. “The best opportunity for foreign investors is the residential market, which is clearly growing and has a good price-earnings ratio.”
Bouwinvest is among the largest real estate investment firms in the Netherlands, with € 6.1 billion assets under management. Executing a low-risk, stable return strategy, it invests on behalf of the Dutch construction industry’s pension fund. Its Dutch core sector funds include residential, retail and office funds that are open to foreign investors. With good return-risk profiles, these unleveraged property funds have consistently outperformed the IPD Netherlands Annual Property Index since 2010.
More than 80 per cent of Bouwinvest’s Dutch properties are in growing urban regions and within the liberalised rental segment. Valued at about € 2.6 billion, its 224 residential properties posted an average occupancy rate of 96.4 per cent last year.
“We have positions in the attractive regions such as Amsterdam, the Hague and Utrecht, and can source a pipeline from developers and building companies with the best specifications we need for the future,” Van Hal says.
A long-term investor, Bouwinvest also has about € 2 billion spread across mature, transparent and low-risk markets in Europe, North America and the Asia-Pacific. It is eyeing long-term partnerships in Asia with established fund managers that have a clear governance structure and a low-risk investment strategy.
“We work together with like-minded managers in every region because real estate is a local business,” Van Hal says. “We have in-depth knowledge of the Dutch market so we are a good partner for pension funds investing in the Netherlands.”