NETHERLANDS - Dutch pension fund giant ABP has signed the biggest real estate deal The Netherlands to date, and is transferring the assets of its €1.6bn KFN non-listed real estate investment trust to ING Real Estate.
In a statement released this afternoon, the two parties said KFN, which has 80 office buildings totalling 600,000m2 in prime office space, including landmark buildings such as WTC Amsterdam and Schipol and Weena Tower Rotterdam, will now be held within two of ING Reim's investment funds and substantially expanding the ING Dutch Office fund.
Under the terms of the deal, ABP will retain an investment of €365m in equity and ING will supply bridging equity of €140m while 44 staff currently employed under KFN will be transferred to ING.
More specifically, the open-ended investment ING Dutch Office fund will obtain 228,226m2 of offices and ABP will have a €300m equity stake while the 367,861m2 balance of the portfolio will be held in the ING Office Fund Netherlands, which holds, reworks and is likely to resell the assets in the medium-term.
That said, this deal also means Paul Visman and Frank Hedriksen, currently ceo and coo at KFN have decided to continue their careers "outside of KFN", according to the joint statement.
Completion of the deal is still subject to regulatory approval but is expected to be completed in the first quarter of this year, but once cleared KFN will repay its 2004 €450m commercial mortgaged-backed securities loan and the 2005 €200m syndicated loan.
Roderick Munsters, chief investment officer of the €215bn pension fund ABP, said this latest deal marks the "culmination" of its strategy to reduce its wholly-owned indirect property investment in the Netherlands to just a minority stake.
"This transaction with regard to KFN is a historic moment for ABP. In 1995, ABP placed its direct real estate investments at arm's length in separate retail, housing and office funds. From the beginning it was our intention to reduce our interest in these funds to a minority share in order to diversify our real estate portfolio further internationally and to increase liquidity.
He continued: "Over the past few years, we have realised our ambitions for the retail fund - now known as Corio - and the housing fund - not Vesteda. We are proud that as the last step in the process our Dutch office portfolio and the KFN team will be moving to a global player."