The Dutch listed sector, which ranks eighth in Europe in terms of market capitalisation, can learn from neighbouring market Belgium in its efforts to grow, EPRA's Insight Amsterdam heard.
Although older than its Belgian counterpart, the Dutch REIT system FBI, established in 1969, is not as flexible, panellists said during the event at the offices of law firm Loyens & Loeff (pictured) on 12 January.
Currently, the four domestically quoted Dutch REITS in the EPRA Developed Europe Index have a market capitalisation of about €5 bn, putting the Dutch in eighth place behind Belgium and slightly above Austria.
When asked by moderator Remco Simon of Kempen & Co what it would take to grow the small Dutch listed sector, the sole Belgian on the panel, CEO Christian Teunissen of recently listed student housing company Xior, suggested the Belgian REIT regime was more flexible than the FBI. The Belgian REIT system was introduced in 1995 and updated in 2014.
'In addition we have retail investors and that makes it easier for us to start with a small portfolio,' he said. Xior launched with €200 mln of Dutch and Belgian assets. Finance was also easier for Belgian real estate companies to access during the downturn, he added.
Passive investment style
Panellist Bernd Stahli, CEO of office investment company NSI, said the Dutch REIT system was holding the market back. 'We don't have the REIT structure here that would make things a little bit easier,' he said. 'The system also applies to investors in other asset classes, and it requires a very passive investment style. The market wants us to be more proactive and it would help if we actually had a proper Dutch REIT structure in which we could operate a little more flexibly.'
Patrick Kanters, head of real estate at giant pension asset manager APG, said that private equity investors have not turned to the stock market in the Netherlands, as happened in Germany, to exit portfolios. 'The German residential market was non-existent 10-15 years ago; now it's a very sizeable one.' Kanters said that Dutch pension funds, particularly smaller ones, are not showing any inclination to divest or reduce their massive residential holdings via IPOs.
While agreeing that REIT laws in other countries allow for more flexibility, Evert Jan van Garderen of Eurocommercial Properties said improvements had been made to the FBI regime over the years. 'Maybe it's not perfect, and something like the French SIIC model might help, but I know many other countries where the local structure is not considered perfect either.'
Van Garderen said he would also welcome the listing in Amsterdam of real estate companies like his own that are active in other countries as well.
