Dutch pension fund makes first foray into housing via Bouwinvest
Dutch pension fund BPF Zoetwaren, which decided to allocate to real estate for the first time this year, has invested in its domestic residential market.
The pension fund for the confectionary industry has invested €30m in the Bouwinvest Dutch Residential Fund, a €2.6bn vehicle managed by the investment arm of construction workers’ pension fund BPF Bouw.
Leo Dekker, chairman of BPF Zoetwaren, said: “The pension fund decided after the findings of our last ALM study that we would start to invest in real estate from 2014.
“Real estate provides a stable and sustainable return for the retirement income of our pensions, and now is a very attractive time to step into the housing market.”
The moves comes at a time when the Dutch property market appears to be recovering and local institutions are seeking to take advantage of new rules that could force housing associations to sell assets.
Earlier this year, Rabobank Pension Fund invested €50m in the residential fund.
Bouwinvest chief executive Dick van Hal said the mandates showed institutional investors were “increasingly aware of the probably once-in-a-generation investment opportunities arising in the mid-priced rental sector in the Netherlands due to the upward turn in the cycle and the government’s moves to rebalance the housing market to attract private capital and boost supply”.
Dekker said Bouwinvest “came out on top” during its due diligence of investment managers.
“The important factors for us in this decision were the quality of the investment team and the portfolio and their solid track record on returns during the past few years,” he said.
Bouwinvest claims the Dutch Residential Fund is the largest of its type on an “unleveraged basis”.
It is one of three domestic property funds managed by Bouwinvest, which were all created out of BPF Bouw’s directly held domestic real estate portfolio.
In 2010, the pension fund seeded the funds and effectively opened up its portfolio to other investors.
This enabled it to reduce its exposure to the Dutch market without having to sell assets and to redeploy capital to international markets.
The Bouwinvest Residential Fund portfolio consists of around 15,000 homes, mainly in the liberalised higher rental segment of the market and within the major urban areas of the Randstad conurbation – the strongest economic and most densely populated region of the Netherlands.
The fund is developing approximately 1,900 homes.