REAL ESTATE - Dutch institutions' investment in the real estate sector have surged to €29bn, according to De Nederlandsche Bank (DNB).
"The balance total of the number of Dutch investment institutions in the real estate sector under supervision of the DNB has grown since the beginning of 2005 [from €24.5bn] to €29bn in June 2006," the central bank said on its web site.
Whereas in previous years the number has been fairly constant, the total has grown steeply since the beginning of 2005.
The DNB explains these findings as a result of the Dutch real estate sector's good performance in the past year and the addition to reserves.
It reports that the influence of new inflows on the balance sheets of real estate funds was small in the past 18 months (amounting to a net inflow of €231m).
Hans Janssen Daalen, general director of the Dutch Fund and Asset Management Association, doesn't see this as a bad sign.
"In the Netherlands there is a fairly large real estate market and these investment institutions have always been quite prominent in the Netherlands, hence I would not give a negative explanation."
He denied the data implied a flight into a safe property market.
He said: "I don't think you should look at it like this. In the past few years we have had a struggling stock market, this market was under so much pressure that investors looked for solace in real estate as this market experiences a more stable development."
He also thinks that the fixed income market shows too little movement, hence investors are looking for more stable markets where they can get higher returns, such as can be found in the real estate sector.
The various types of Dutch investment institutions together have a balance total of €110bn; the funds in the real estate sector now have a market share of about 26%, making them the largest investment type after equity funds (37%), according to the DNB.
Elsewhere, Bouwfonds, the soon-to-to-divested real estate subsidiary of ABN AMRO, has posted profits of €92m for the first half of 2006 - an increase of 30% over the same period in 2005.
The results reflected a growth in profits across all the firm's activities.
In development, it was primarily the commercial segment that boosted the results, with the completion of several projects in the reporting period. The Netherlands and Germany also saw an increase in residential sales.
The firm's asset management business also reported positive results as a result of the introduction of new funds and an increase in assets under management.
The firm, which only forecasts "general prospects", refused to be drawn on whether the results were sustainable longer-term. However, spokeswoman Viola Teepe said: "We expect net profits in 2006 to exceed those for 2005."
Teepe also said it was too early to determine the likely impact of the sale of the company. Rabobank last month agreed buy the firm for €845m.
"It's too early to talk about the parent company," she said. "So far the deal has progressed to a letter of intent, though we expect it to be completed by the end of the year."