Bouwinvest to increase international real estate allocation to 40%

Bouwinvest, the €7.5bn Dutch property investor, has raised its strategic allocation to international real estate from 25% to 40% in anticipation of strong growth in major emerging-market cities.

According to its 2015 annual report, the property investor for BpfBouw – the €51bn pension fund for the Dutch building industry – plans to shift its focus from Europe to Asia Pacific and the US, targeting sustainable logistics and care property, as well as hotels and student housing.

Bouwinvest chief executive Dick van Hal told IPE Real Estate the company’s policy with regard to its 4% allocation to the UK had not changed, “as many uncertainties about Brexit remain”.

“But of course,” he added, “we are monitoring developments, including new opportunities arising in mainland Europe.”

Bouwinvest said 17 other Dutch pension funds had taken a combined stake of €420m in its Dutch residential, retail and office funds since it made them fully available for external investors in 2013.

According to Van Hal, six schemes joined last week, committing €170m in total, chiefly to its €3.2bn Dutch Residential Fund.

He said he expected “many more” schemes to invest in the coming years due to falling interest rates and anaemic bond markets.

For 2015, Bouwinvest reported an overall return of 12.8%, generating 2.2 percentage points of return on its currency hedges.

European real estate, returning 19.2%, produced the best performance, with non-listed and listed real estate returning 17.9% and 16.1%, respectively.

The overall performance of US property holdings was 13%.

Bouwinvest said its residential fund returned 12.5% and that investment in new projects amounted to €466m last year, with more than €690m in the pipeline.

Its retail fund, focusing on the redevelopment of existing shopping centres and new developments, returned 4.5%.

The property investor said the friction between rising demand for modern, cost-effective offices and retail assets in prime locations and buildings in secondary locations that are gradually vacated was likely to continue over the next couple of years.

It said its “very promising” new Healthcare Fund and its Hotel Fund – both exclusively managed for BpfBouw – had returned 7.7% and 8.4%, respectively.

Bouwinvest’s stake in building locations, with the potential for 1,750 residential properties, generated 2.7% in 2015, up from a loss of 16.7% over the year previous.