Dutch pension fund PMT has committed €150m to become the cornerstone investor in Aberdeen Standard Investments’ new European residential fund.
The €68bn pension scheme for Dutch metalworkers said there was an expectation that the open-ended fund would eventually reach €1.5bn in size.
Aberdeen Standard Pan-European Residential Property Fund will focus on residential rental property in Western Europe, including the Nordic countries.
PMT said it would be the first of its kind and its strategy was predicated on urbanisation trends.
The pension fund said MN, its fiduciary asset manager, and Aberdeen Standard had developed the fund strategy together, “anticipating geographical and demographic trends, a high occupancy rate, low leverage and costs, as well as a solid focus on sustainability”.
The fund’s manager Marc Pamin said: “As a consequence of their attractiveness and urbanisation, many European cities have an enormous housing shortage, resulting in a large and growing demand for high-quality residential housing in locations with desired facilities.
“In student towns, for example, there could be a different need for housing than in towns with predominantly professionals and families. This is what we will focus on.”
Jeroen Reijnoudt, senior portfolio manager at MN, said the concept of pan-European, open-ended residential strategies was still in its infancy.
He said Aberdeen Standard was chosen in part because of its strong local presence and a shared view on investing in residential property.
According to IPE Real Assets’ forthcoming Top 100 Real Estate Investment Managers’ survey, the €51.1bn Aberdeen Standard manages €2.66bn of residential assets, €2.59bn of which are in Europe.
Prior to its merger with Standard Life earlier this year, Aberdeen Asset Management had become one of the biggest institutional residential investors in Europe. Standard Life had no exposure to the sector.
Hartwig Liersch, chief investment officer at PMT, said MN was increasingly working with fund managers to develop of core real estate products on behalf of PMT.
“As a result, PMT achieves a good match of non-listed property funds within its mandatem,” he said. “In addition, non-listed property products are being created, which could be interesting to other institutional investors.”
He said that PMT considered residential rental property as an attractive addition to its European real estate holdings, because of low correlation with commercial property and the stable income it generated.
With 9% of its assets invested in real estate and a European property investment programme of €2.5bn, PMT is one of the largest property investors in Europe.