Bouwfonds Investment management is preparing to launch a follow up to its Bouwfonds European Residential Fund (BERF), which has turned in a strong performance over the last year.
Netherlands-based Bouwfonds Investment Management is preparing to launch a follow up to its Bouwfonds European Residential Fund (BERF), which has turned in a strong performance over the last year.
'Bouwfonds IM is currently preparing a second European residential real estate fund in response to the strong demand among institutional investors for investment opportunities in European residential markets,' said Martin Eberhardt, country manager of Bouwfonds IM Germany. 'We plan to launch the fund in the first half of 2016. The fund will invest in residential properties in Germany, the Netherlands, France, Spain and the UK and targets European investors. The intended volume is about €750 mln and €1 bn.'
Bouwfonds' announcement of the new fund comes as the initial fund, Bouwfonds European Residential Fund (BERF), reported strong growth in the past 12 months. The BVI return of BERF for the year was 5.7% at the end of February 2016, 90 basis points above the five-year average, which stood at 4.8% as at the same date.
The fund performed significantly better than indexes such as the OFIX Europe (open-ended real estate funds for retail investors, 1-year performance: 0.8%, 5-year performance 0.5% as of February 2016) and the SFIX Europe (real estate special funds, 1 year performance 2.6%, 5-year performance of 0.8% as of December 2015), whose focus is on commercial real estate. Bouwfonds IM also improved the fund portfolio occupancy rate – from 97.3% in late April 2014 to 98.6% at the end of February 2016.
Michiel Dubois, managing director of residential real estate at Bouwfonds, commented: 'BERF’s development has again been highly gratifying. The improved performance in the last twelve months was driven by our Pan-European investment strategy and the quality of the assets. We see this as an affirmation of our strategy of investing in residential properties throughout Europe. Our strategy also includes the acquisition of residential development projects. We acquired seven assets with a total value of €160 mln in 2014/2015. Of these, five properties were still in the development phase at the time of the acquisition. This contributes to the large share of young properties in the portfolio. Around a quarter of the portfolio is less than five years old.'
Since launching the first European residential fund nine years ago, Bouwfonds IM has built up a portfolio of 77 residential properties in five European countries. BERF currently comprises a total of around 8,200 residential units. Approximately half of the portfolio is located in Germany, around 20% in the Netherlands, 15% in Denmark and roughly 11% in France.
The fund’s property assets amounted to €868 mln at the end of February 2016, with a debt ratio of no more than 21.9%. BERF is an open-ended mutual property fund for institutional investors with a minimum investment of €500,000.
Bouwfonds IM manages a portfolio with a total value of € 6.3 bn, distributed across commercial and residential real estate, communication infrastructure, car parks and agriculture. Bouwfonds IM has local offices in the Netherlands, Germany, France, Poland and Romania.
