Achmea Real Estate has received two mandates totalling €117 mln from a Dutch insurer for its Achmea Dutch Retail Property Fund (ADRPF) as the investment management suggests reasons for a revival of the battered sector.
The unnamed insurer is already an investor in its fund, which crucially has shifted its focus in recent years from retail properties in smaller cities towards dominant neighbourhood shopping centres and retail properties in the nine strongest city centres in the Netherlands.
The company managed to back the strategy in 2022 with the acquisition of two retail portfolios, taking the fund size to nearly €1 bn.
Fund manager Peter Koppers said he saw the retail property market in the best Dutch inner cities picking up despite the economic uncertainties.
‘Vacancy rates in inner cities are falling due to increased demand from new entrants and expanding retail chains. In addition, we are seeing many transformations to other functions.’
Protection against inflation
In the Dutch retail sector, leases are often indexed with inflation, he noted. ‘With that, they can follow inflation much better than other real estate sectors. Now that market rents are stable, or even growing, the retail sector is expected to offer investors protection against rising inflation.’
‘Retail real estate currently has high cash flow returns compared to other real estate sectors, while the risks in the Netherlands are greatly reduced. Strong declines in value due to rising interest rates are less likely than other segments due to higher initial yields.’
Koppers added he saw a revival of retail real estate coming.
Webrooming
Stores play an important role in approaching consumers. While consumers have started to store more online, they are visiting shopping areas in a more targeted way. They engage in webrooming. This involves consumers searching online for an item before buying it in the store. The store today has multiple functions. Not only the transaction is important, but also precisely conveying the brand or concept to the consumer.’
Achmea invests on behalf of more than 30 pension funds and other institutional investors, and has around €13 bn of residential, retail and healthcare real estate.
