Bouwinvest takes Dutch PRS to new level with Amsterdam landmark

A prestigious residential development in Amsterdam’s western port area is putting the Dutch capital firmly on the private rental sector (PRS) map both at home and globally.

In recent months, the Ponsteiger project has hit the headlines following the purchase of a €16 mln luxury penthouse by Dutch catering entrepreneur Won Yip. Spanning a total of 1,400 m2 on the upper floor of the futuristic landmark, the penthouse is the largest in the Netherlands and its sale – originally as four individual units - reportedly attracted interest from buyers from as far afield as the UK, US and China.

The colossal penthouse and the other 65 owner-occupier apartments may be capturing the imagination of the local media, but the story behind the 300 rental apartments in the iconic building is equally compelling. While developers Dura Vermeer and De Nijs Projectontwikkeling are responsible for the overall project, the apartments for rent are being financed by local residential specialist Bouwinvest.

Appetite from potential tenants is strong, Michiel de Bruine, Head of Asset Management Residential at Bouwinvest, told PropertyEU in an interview. The apartments are not scheduled for delivery until the end of 2017, but already more than 2,000 candidates have expressed interest, he said. ‘Supply of rental apartments is tight in Amsterdam, so there is huge demand for this type of product.’

Rising prices
De Bruine conceded that rents for the Pontsteiger apartments – which range from 60m2 to 90 m2 in size - would exceed €1,000, the upper end of the norm for the medium-priced segment. He declined to provide further details, but said that rents would be fixed in line with market trends at the time of delivery two years hence. Sales prices for apartments in the Dutch capital have soared in recent years, he added. ‘This project contains only 300 apartments out a total of almost 15,000 houses in our Dutch residential portfolio, but a landmark like this is good for our branding. That Bouwinvest as a core investor was able to acquire this object, shows the strength of our Dutch network. We are moving up with the market. Prices for apartments have risen sharply and returns are following suit.’

A development like Pontsteiger is a boost to Amsterdam’s image as an international city, De Bruine said. ‘We have seen both domestic and international interest in this project.’

Ponsteiger may be the most spectacular development in Bouwinvest’s portfolio, but the company is not targeting iconic landmarks as a goal in itself, De Bruine said. ‘Landmark projects like this are great, but that’s not why we buy them. Every asset that we buy is unique and must meet the needs of the market. In the past two years, we have acquired over 30 developments in the Netherlands and all of them are unique. Our goal is to generate long-term returns via attractive housing in good locations.’

Big development pipeline
Bouwinvest is betting heavily on PRS in the Netherlands and claims its Dutch Residential Fund is the largest investor in residential development in Amsterdam. It currently has 4,000 rental apartments in Amsterdam and another 2,000 under development in the Dutch capital. Notable acquisitions in the capital last year included 450 apartments on the Haarlemmerweg, where a former ING office will be transformed into housing units, as well as the Nautique Living development project in the trendy NDSM shipyard area where 475 apartments will be realised. In total, Bouwinvest has 15,000 rental apartments in its portfolio. Besides the western part of the Netherlands, Bouwinvest also has apartments in Breda, Arnhem and Nijmegen.

The company expects to deliver 500 new apartments in Amsterdam this year including units at a location near the capital’s Zuidas business district, De Bruyne said. That figure will rise in 2016, he added. ‘We have a lot of confidence in the Amsterdam residential market. We have added significant numbers of housing units there in the past few years and they have been taken up very quickly. There is still a huge shortage of non-regulated rental housing in the Netherlands, especially in Amsterdam, and we will continue to invest there in good locations. Our total investments in the Dutch Residential market for the coming three years will be around € 600 mln.’

Attractive inner-city locations like the western port area where Pontsteiger is arising are scarce, De Bruine conceded. ‘The competition is also looking for new locations, both local institutional investors and foreign players. In that context, it is important that the municipal authorities continue to steer developments to the best locations and to accommodate non-regulated rental housing.’

Elsewhere in the Netherlands, Bouwinvest is currently developing 43 CO2 neutral housing units in Rijswijk, between Delft and The Hague, and expects to sign soon for another 157. The houses not only have solar panels, but also triple glazing and a heat recovery installation. The total housing costs are the same as for a conventional home, but the energy costs are lower, De Bruyne said. ‘This is the first project of its kind for us with such high standards in terms of sustainability. We firmly believe that we need to invest in sustainable buildings and that investors will reward them in the future. Since 2014, our Dutch residential portfolio has been rewarded with a GRESB green star, the highest ranking in this sustainability benchmark. We will be doing more of this sort of development in the future.’

In terms of returns, Bouwinvest’s Dutch Residential Fund already has a good track record, De Bruine said. ‘We expect to again outperform the IPD index for 2015 and expect to do the same this year. Part of the reason is that more than 80% of our residential portfolio is located in the western part of the Netherlands and a signficant portion of that is top-quality product located in Amsterdam. Roughly 90% of our portfolio targets non-regulated rental homes and only 10% comprises social housing.’

Bouwinvest claims to be the largest unleveraged investor in Dutch residential property.