NETHERLANDS - Dutch pension fund BPF Bouw has increased its allocation to listed real estate as part of a plan to invest in both public and private real estate in a fully integrated way.
The Dutch pension fund for construction workers will be able to invest as much as 8% of its real estate capital in listed investments, as part of a portfolio managed by a single, integrated team at asset manager Bouwinvest Real Estate Investment Management.
Stephen Tross, director for international investments at Bouwinvest, said the strategy would set it aside from the more common approach of employing two separate teams for public and private property investments.
Speaking at Expo Real in Munich, Tross told IP Real Estate the fully integrated listed strategy would enable Bouwinvest to take advantage of market cycles and arbitrage opportunities with the non-listed sector.
Another main objective is to "fill in holes" where Bouwinvest is unable to find the right non-listed product, whether a real estate fund, club deal or joint venture.
A recent example was an investment in five real estate investment trusts (REITs) to gain exposure to regional malls in the US. Many of the best assets in the sector are held by listed REITs.
Bouwinvest analysed the universe of regional mall REITs in the US and selected five for investment.
Tross described the investment as a "mini mandate".
Fellow Dutch pension fund asset manager APG also made an investment in regional US shopping centres this year, but the company chose to go through a non-listed route by entering into a joint venture with US financial services group TIAA-CREF to acquire several assets.
Another possible market for further listed investments is Canada. Tross said Bouwinvest was interested in investing in the market and saw REITs as a potential way in.
Bouwinvest continues to target non-listed real estate investments and is looking to form a joint venture focusing on German offices, while it also plans to increase its exposure to European and Asian logistics.
It recently acquired a Swedish shopping centre through a joint venture with Grosvenor Fund Management, closed on a club deal to invest in Tokyo offices and increased its existing holding in a core Australian property fund.
Bouwinvest is a subsidiary of BPF Bouw and manages the pension fund's domestic and international real estate exposure.
The company is also in the market to manage the real estate assets of other pension funds, including through its three Dutch property funds targeting office, retail and residential, respectively.