23 February 2021
Bouwinvest Real Estate Investors and CBRE Global Investment Partners (CBRE GIP) have entered into a strategic partnership with ION, one of the leading real estate developers in Belgium, to invest €280 million in affordable new-build houses and apartments exclusively for the rental market.
Bouwinvest and CBRE GIP, on behalf of one of its clients, will be equal investment partners while ION will take a minority interest and act as service provider. The joint venture’s initial investment capacity of €280 million is expected to increase over time.
ION Residential Platform (IRP) will be the very first unlisted institutional housing platform in Belgium and is to focus primarily on the largest urban areas in the country. Projects will be sourced from ION’s development pipeline and will also be supplemented with acquisitions from other developers. The platform plans to make a number of purchases in the coming months.
Jasper Petit, Senior Portfolio Manager European Investments, Bouwinvest Real Estate Investors, commented: “Affordable housing as an asset class offers an interesting opportunity to create value in both financial and social terms. The fundamentals for this investment are strong due to ongoing urbanisation and a growing housing shortage in urban areas. We are keen to expand our investments in this segment given the sustained demand and lower risk level and are excited to pursue this particular strategy together with ION and CBRE GIP.”
Growing demand for rental housing
Approximately 72% of Belgians are currently homeowners but research shows that this number will decrease considerably over the next decade which means that tens of thousands of additional Belgians will rent a home instead of owning one. The number of homeowners is already below 55% in major cities such as Brussels, Antwerp, Charleroi, Ghent, Liege and Leuven. A downward trend is particularly noticeable in new buildings and in the suburbs.
Robert Koot, Director European Investments, Bouwinvest, said: “This investment will enable us to strengthen our presence in Belgium, in particular, the largest cities. It also contributes to Bouwinvest's objectives of achieving a solid long-term return in a sustainable and socially responsible manner."
IRP aims to become a reference among tenants by offering high quality and professionally managed homes. The platform’s sustainable projects will actively contribute to a more climate-friendly housing market and the joint venture will provide the partners a stable long-term return, with the prospect of further growth in an attractive new market.
Davy Demuynck and Kristof Vanfleteren, co-CEO’s of ION, said: "The launch of this joint venture is a next step in the development of ION, as an investor-developer. We believe in the Belgian rental market and have the ambition of achieving significant growth. The partnership with two leading institutional investors will allow us to realise our ambitions more quickly. By combining each other's expertise, we will be able to grow rapidly and maximise our focus on sustainability and innovation in this new market."
Casper van Grieken, Head of CBRE Capital Advisors Netherlands, added: "We are very proud of the creation of this joint venture. We are convinced that the combination of Bouwinvest and CBRE GIP's global residential investment experience combined with ION's pipeline, sustainability knowledge and local expertise will lead to wonderful results. The Belgian residential investment market is very interesting and this step gives a further boost to the market."
Bouwinvest continues to expand its affordable housing strategy
Bouwinvest Real Estate Investors is one of the leading players in the affordable housing sector in its home market the Netherlands, which faces a huge shortage of accommodation in the mid-range rental segment where monthly rent levels range between € 720 and € 1,000.
The company invests in all the major property sectors worldwide, but affordable housing alongside logistics is emerging as one of the key winners of the Covid-19 pandemic and Bouwinvest is interested in increasing its investments in all the regions where it is active including North America, Asia Pacific and Europe. Mega trends such as globalisation, population growth, urbanisation, sustainability and digitalisation are prompting institutional clients to look for stable returns in a low-interest environment. Affordable housing offers our pension fund investors opportunities for stable returns, while liveable, affordable and inclusive cities provide a better guarantee for the attractiveness of an area and therefore the value retention of the buildings located there.