Dutch pension schemes boost domestic residential funds

Pensioenfonds PNO Media has invested €30m and €40m in residential funds managed by ASR and Amvest.

Meanwhile, the Pensioenfonds Fysiotherapeuten, the pension fund for physiotherapists, has doubled its stake of €25m in Amvest’s Residential Core Fund.

PNO and Pensioenfonds Fysiotherapeuten were both advised by Grontmij Capital Consultants.

The firm’s senior consultant, Ronald Bausch, told IP Real Estate that the commitments were made in unison and with a view to balancing exposure across the Randstad area, which covers the country’s four main cities of Amsterdam, Rotterdam, Utrecht and The Hague.

“The funds work well in combination,” Bausch said. “All three funds have underlying exposure to areas of the Netherlands where you’d want to be.”

International investment in Dutch residential property was, he said, a sign that the market was once again in vogue.

Atttractive yields, combined with low leverage levels, Bausch said, make residential investment a core strategy for most pension funds.

Pensioenfonds Fysiotherapeuten joined ASR REIM’s fund in March, doubling its initial commitment of €25m.

In January, Bouwinvest said Pensioenfonds Fysiotherapeuten and PNO had respectively invested €25m and €40m in its residential funds.

Robbert van Dijk, ASR fund director, said institutional investors are showing ”great interest” in its vehicle. Van Dijk said €80m of external capital has now been raised for the fund this year.

Amvest’s fund, meanwhile, will use the capital to increase it portfolio, which is focused on sustainable housing schemes in Amsterdam and Almere.

A PNO spokesman told IP Real Estate that the Dutch residential sector offers “interesting opportunities”.

“House prices over the last couple of years declined by about 15%-20% but have stabilised in the last few quarters,” he said.

In some areas, such as Amsterdam and The Hague, prices are “slowly rising again”, he added.

“With the current exceptional low interest rates environment, we think low-risk residential housing is a good investment,” he said. “We believe that Dutch residential property will provide a very decent return for the next five to 10 years,” he added. “As a pension fund, we are in it for the long run.”

Speaking at Pensioenforum in Scheveningen late last year, Wim Wensing, Amvest investment management director, said larger pension funds had begun to show “growing interest” in the asset class.

He added that Dutch pension funds’ appetite for domestic property was returning as the market bottomed out, and that investors were focused on high-quality retail centres and domestic property in growth areas, pointing to the Randstad’s increasing occupancy rates.