GLOBAL – Joint ventures and club deals have enabled PGGM Investments to achieve low investment costs for real estate, but senior strategist Maarten van der Spek has warned against portraying club deals as "the holy grail".

Speaking at the Invesco Real Estate Conference in Amsterdam last week, Van der Spek said the Dutch pension asset manager had achieved a total expense ratio (TER) of 1.3% for its entire non-listed portfolio.

He also said joint ventures and club deals provided a more effective alignment of interests and greater strategic flexibility.

Guido Verhoef, head of private real estate at PGGM Investments, told IP Real Estate that custom-made investments that meet the needs and requirements of specific investors could be set up with operators when suitable investment products were unavailable in the traditional real estate fund market.

But he warned there were some downsides to such an approach, including greater demands on an investor's in-house resources.

He cited PGGM's recent joint venture with Inland Real Estate Corporation to invest in US shopping centres, which he said took nine months to set up and for which PGGM approves all deals that Inland sources in the market.

Verhoef added: "All major decision are taken by both JV partners, which requires a lot of time, effort and knowledge from PGGM's in-house team."

Van der Spek said he was "passionate about lowering costs" and showed how joint ventures could deliver sub-1% TERs, but he warned that not all investors would be able to set up joint ventures.

He said PGGM had no maximum or minimum limits to its joint venture exposure when asked by Timothy Bellman, global head of research at Invesco Real Estate.

The biggest risk identified by Van der Spek and members of the audience was managing the exit of a joint venture.

But he also questioned the notion of 'like-mindedness' among investors in club deals.