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Dutch pension funds eye direct real estate

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NETHERLANDS - Dutch pension funds have positive expectations about the amount of direct real estate in their portfolios, according to new research.

They aim at an increase from five percent to 8.6%. Large purchases in the coming years are likely, says Statistics Netherlands, based on an investigation by the University of Amsterdam.

The forecast seems to mark a change in the trend within real estate investments. The accent has been shifting for years to indirect real estate. The share of investments has gone up from 4% in 1980 to 32% in 2003.

According to the national bureau for statistics the investments in real estate of pension funds, insurers and investors have increased by €2,1bn to €90bn in 2003.

The amount of indirect real estate has increased from €27.3bn to €29.1bn. Schemes have seen their assets in this category rise from €22.8bn to €24.4bn.

The investments in direct real estate have gone up from €60.6bn to €60.9bn, following a considerable decrease in 2002 as a result of take-overs of some investors by foreign companies.

The trading in direct real estate over recent years is historically high, says the national bureau for statistics. More than three-quarters of the investments of pension funds is aimed at the Dutch market, especially at houses, offices and shops.

An important part of the investments in indirect real estate goes into foreign investors. Since 2000 the foreign part of the total investments has been stable at 60%. Dutch real estate investors have a lot of investments abroad as well. The total amount in 2003 is 63%.

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