Dutch residential real estate investor Vesteda has entered talks with pension fund clients seeking to withdraw €4.1bn from its fund, a figure representing more than half of the vehicle’s total value.
Vesteda, which manages rental apartments on behalf of institutional investors, may be required to initiate large-scale forced asset sales to meet the redemption requests.
Last month, Vesteda disclosed receiving the redemption requests from its pension fund clients and said “almost all clients in the Vesteda Residential Fund [the firm’s only investment vehicle] have notified us that they wish to eliminate or reduce their participation”.
The redemption requests account for 52% of the fund’s total assets.
Most of Vesteda’s clients are Dutch pension funds and insurance firms, including ABP, which spun the company off in 1998 and retains a 33% stake. Other major shareholders include Nationale-Nederlanden with a 24% stake, Allianz with 23% and PGGM with 7% interest, alongside Rail & OV and Pensioenfonds PostNL.
Pensioenfonds PostNL reduced its stake from €93m to €43m last year, according to CIO Jacob Schoenmaker in a recent interview with IPE Real Assets’ Dutch sister publication Pensioen Pro.
Other investors, however, have been asked by Vesteda to negotiate a reduction in their redemption requests. Clients have until 20 April to reach an agreement.
If negotiations fail to yield a result, Vesteda would likely be forced to sell a significant portion of its 28,000 housing units over the next three years.
Robert-Jan Foortse, head of European real estate at ABP’s asset manager APG, told Dutch financial newspaper Het Financieele Dagblad that “everyone agrees” that the current €4.1bn in redemption requests “is neither good for Vesteda, nor for the shareholders nor for the market”.
“That is why we are now looking together at the underlying reasons for everyone’s request and investigate how much in a hurry they are to get their money back.”
Fiscal climate
The impending liquidity squeeze comes after a decade of fast-rising housing prices and fiscal measures by the government reducing return prospects for rental housing. As a result, investors want to bring their allocations to residential real estate back in line with their strategic asset allocation by selling part of their investments.
Another reason for the unprecedented scale of the redemption requests is a worsening fiscal climate for residential real estate investors in the Netherlands. In 2024, the Dutch government moved to cap rents for most apartments at around €1,200 while simultaneously increasing the property transfer tax for institutional investors to 10.4%. On top of this, an exemption to a 25% corporation tax for real estate investors was also scrapped last year.
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