21 April 2021
Bouwinvest Real Estate Investors reported invested capital grew 4% to €13.4 billion in 2020 and generated a return of 3.4% on the entire portfolio despite the turbulent conditions ushered in by the outbreak of the Covid-19 pandemic and the acceleration of market trends such as working from home and online shopping. The favourable performance reflected the unabated growth in demand for affordable housing and care properties, a development Bouwinvest had already anticipated in its portfolio management, further underscoring the foresight of its strategic choices.
Dick van Hal, CEO of Bouwinvest, said: "2020 was of course a very different year for Bouwinvest than we had expected. Our diversified portfolio and long-term vision provided a strong basis, however, and our resilient organisation enabled us to get through the year very well. It’s difficult to predict the future, but real estate continues to fulfil an essential need and that applies not only to residential and care properties, but also to the sectors that fared less well last year. People are social animals and will want to get together again in hotels, shops and offices after the pandemic. That is why we will continue to invest in mixed-use locations with multiple facilities where they can find enjoyment and inspiration."
The pandemic and subsequent lockdowns initially caused a great deal of unrest in financial markets both at home and abroad and Bouwinvest’s return over the year was lower than originally forecast. Nevertheless, the end result was positive and the company is satisfied with this performance given the circumstances. While the pandemic had only a limited impact on the residential and healthcare real estate portfolios, the office, hotel and retail real estate markets came under pressure. The company’s investments in Asia-Pacific generated a modest profit but the European and North American mandates ended the year in the red.
Investing through the crisis
Bouwinvest strongly believes it is important to continue investing in times of crisis and, at approximately €1 billion, the level of investment in 2020 was in line with previous years. In its home market the Netherlands, Bouwinvest acquired healthcare real estate projects, convenience stores and residential developments. Foreign acquisitions accounted for the bulk of investments, however, with Bouwinvest spending a total of €727 million on its international mandates, in particular logistics real estate in Europe and Scandinavia, affordable rental housing in Scandinavia and Belgium, biomedical real estate in the United States and additional student housing in Australia. In September 2020, the company opened a second representative office in New York a year after launching its Sydney office, as part of its goal to expand the international portfolio.
On the road to Paris Proof 2045
Bouwinvest has committed to making its entire portfolio carbon neutral by 2045, five years earlier than set out in the Paris Climate Accord, and in 2020 more than 80% of its invested capital qualified as sustainable according to the GRESB benchmark. The Dutch Residential Fund and the Dutch Hotel Fund both received a GRESB 5-star rating for the first time last year while both the Dutch Office and Hotel Funds were declared 'global sector leaders'.
Investment base continues to grow
Investors remain confident in Bouwinvest's financial and social performance and a total of 26 pension funds and insurers have now entrusted Bouwinvest with €15.7 billion of capital as at end-2020, an increase of €600 million compared to the previous financial year. For 2021, the company is forecasting an after-tax profit of €0.3 million, mainly due to higher costs associated with the implementation of its strategic plan and further professionalisation of the organisation. These costs are expected to stabilise in 2022 and 2023 which would create more room for an increase in profits thereafter.
The annual reports of the Bouwinvest investment management organisation and its Dutch open-ended funds are available online at: www.bouwinvest-annualreports2020.com.