The latest PropertyEU Magazine - published to coincide with the Provada fair in Amsterdam this week - highlights a renewed investment focus on light industrial assets in the Netherlands.
Korean capital is riding high on a wave of cross-border investment that is surging into Benelux property, with a bias towards the Brussels office sector and mega deals in the Netherlands.
Koreans were behind Amundi Real Estate’s acquisition of the Atrium office complex in Amsterdam from Victory Advisers/Icon Real Estate in April. While the financial details and name of the capital source were not disclosed, the Korean Federation of Community Credit Cooperatives (KFCCC) has been suggested as the likely end-investor.
The transaction was heralded as the largest Dutch single-asset deal ever and market sources suggest a purchase figure of €500 mln. The link to KFCCC stems from the fact that Amundi acted for the cooperative and Seoul-based Meritz Fire & Marine Insurance company in the previous record-breaking single-asset deal in the Netherlands. This was the €350 mln acquisition of office-led tower De Rotterdam in the Dutch port city in June 2016.
Dutch recovery
Looking beyond the Koreans, the general cross-border focus has been on the Dutch investment market which is bouncing back strongly following the dark days of the crisis.
Data compiled and analysed by PropertyEU Research graphically charts the ebb and flow. The annual investment volume for 2007 – the last boom year of the previous decade – came to €10.9 bn, hung in at €9 bn the following year and then slumped to €5.2 bn in 2009.
The investment market seemed to recover its footing in 2010 to finish the year on €6.3 bn, before crashing to €4.8 bn and €4.3 bn respectively in 2011 and 2012. The following year saw volumes crawl back to €5.7 bn before low interest rates and a more positive economic outlook and firming real estate fundamentals helped draw a wave of foreign investors back into the Netherlands.
Increasingly institutional rather than opportunistic in nature, this capital propelled deal volumes to €10.2 bn in 2014, reaching new records of €12.4 bn and €13.5 bn in 2015 and 2016 respectively.
Cross-border demand has continued into the first quarter of this year, with PropertyEU recording €3.24 bn of real estate investment, the highest volume in a traditionally quiet Q1 since 2007. Foreign investors were responsible for €1.93 bn, or just under 60% of the Q1 total. US-based firms were the biggest buyers (26.5% of the total), thanks in no small part to Blackstone.
Industrial approach
Blackstone has been chiefly active in the Netherlands so far this year as part of its strategy to build up a pan-European light industrial platform in a joint venture with M7 Real Estate as operating partner.
Blackstone and M7 – acting under the banner of the ‘Onyx venture’ – agreed in March to acquire two large portfolios of light industrial assets from UK REIT Hansteen for €1.28 bn.
The sale covered 100 German assets, valued at €887 mln, and 71 assets in the Netherlands, valued at €308 mln. A day after the Hansteen deal, the Onyx venture added a further 26 Dutch assets for €130 mln. The vendor was HIG Capital.
In April Blackstone unveiled a partnership with Delin Capital Asset Management (DCAM) on a new core+ logistics strategy in the UK and western European markets. The investment volume for a 230,000 m2 seed portfolio of UK and Dutch assets is believed to be €220-250 mln.
The industrial sector accounted for 21% of the spend on Dutch real estate in Q1 2017, on a par with offices (21%) and just ahead of retail property (20%). And the industrial sector is not finished yet. Singapore’s Frasers Property paid €315 mln in April for Geneba, the Amsterdam-based owner of light industrial in the Netherlands and Germany.
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PropertyEU Investment Briefings at Provada
PropertyEU Magazine May 2017 *
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