Two Dutch pension funds are looking to capitalise on the strong employment market in Utrecht by building rental apartments.

The €19bn asset manager SPF Beheer is constructing the 330 units on behalf of the Dutch pension funds for railways (SPF) and public transport (SPOV).

The apartments are part of the Galaxy Tower, which also includes a 250-room hotel, opposite Utrecht’s main station.

SPF Beheer said the apartments will be at the upper end of the mid-segment of the Dutch rental sector and will have a surface area of 69sqm. 

Construction will start next year and completion is scheduled for 2020.

SPF Beheer said growing employment is pulling many highly educated workers to Utrecht, leading to a shortage of housing, in particular of mid-priced property.

“We expect that Utrecht will follow in Amsterdam’s footsteps as far as price rises are concerned,” a spokesman said.

The asset manager said the Dutch housing market has shown to be one of the most stable property sectors, with a good risk-return ratio, a low correlation with the real economy and providing a partial inflation hedge.

During the past two years, SPF Beheer has purchased around 1,000 residential properties in total for SPF and SPOV in eight different projects, including 160 properties in Arnhem and 71 in Amsterdam.

It is going to announce two more contracts for the construction of residential property shortly.

According to the spokesman, finding high-quality projects in good locations is a major challenge, as demand far outstripped supply.

“Therefore, it is important that a buyer can quickly provide clarity to the selling party,” he said.

The majority of SPF Beheer’s real estate investments comprise direct Dutch property, with the highest strategic allocation for the residential and retail sectors.

Asset manager MN recently invested in the construction of 150 mid-segment apartments in a tower block in the north of Amsterdam on behalf of the €67bn Dutch metal pension fund PMT.

PMT said it wanted to increase its investments in Amsterdam, but noted that land prices were already that high that new apartments would have to be very small in order to be profitable.

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