M&G Investments in Dutch resi debt deal

M&G Investments has provided a €110m loan to a Dutch residential investor as the sector shows signs of renewed appeal.

The senior loan from M&G is the largest acquisition financing in Dutch residential property since the credit crisis and is backed by a portfolio of residential units and several commercial properties.

The portfolio, bought by the Dutch sponsor from several vendors, is spread across the Netherlands, with a 2008 apartment complex in Amsterdam the largest property in the portfolio. Properties in Groningen, Heerenveen and Rotterdam make up the 1,250-unit portfolio.

M&G said the loan – at 65% LTV – has a 10-year term and is part fixed and part floating. The lender said the loan was less rigid than typical bank financing.

Paul Dittmann, head of senior mortgages at M&G Investments, says: “The Dutch market, both in the commercial and residential areas, has had a difficult period and fundamental problems but there will always be relative value opportunities.”

Dutch residential specialist Bouwinvest, meanwhile, has bought 300 high-end rental apartments in The Pontsteiger on Amsterdam’s IJ waterway. Bouwinvest bought the flats for its €2.6bn institutional residential fund. Construction is scheduled to start in June next year, with completion due in late 2017 – a decade after inception. Plans were first drawn up in 2007 but delayed by the financial crisis.

Allard van Spaandonk, Director Netherlands Bouwinvest said: “We are seeing clear signals that the Dutch residential market is bottoming out after five years of successive price falls. Combined with new government legislation to rebalance the domestic housing sector and make it more open to market forces, we expect both solid capital gains and rental increases in the Netherlands in coming years.”

Bouwinvest said that with Dutch house prices down by more than 18% since 2008, rents have risen, returning the house-to-rent ratio to its ”long-term fair value level”. New legislation, it added, has substantially opened up the country’s rental market.