German investors are on course to boost their share of transactions in the Dutch real estate market to around EUR 1 bn this year. This is significantly more than the figure for the past two years. In 2009, German investors accounted for transactions worth some EUR 570 mln compared to €750 mln a year earlier.
German investors are on course to boost their share of transactions in the Dutch real estate market to around EUR 1 bn this year. This is significantly more than the figure for the past two years. In 2009, German investors accounted for transactions worth some EUR 570 mln compared to €750 mln a year earlier.
Since the beginning of this year, German closed-end funds in particular have been involved in a significant number of office transactions in the Netherlands involving more than €500 mln in the first six months alone. Real IS has been one of the most active German investors in the Netherlands so far this year.
The asset management vehicle of Bavarian bank BayernLB, which is part of the Sparkassenfinanzgruppe, has so far targeted Amsterdam, Rotterdam and The Hague. The fund is primarily interested in the office market, board member Jochen Schenk told PropertyEU in an interview. 'But we're not ruling out retail,’ he added. The fund has several criteria for office building acquisitions, he continued. ‘For example, we require a single tenant with a rental contract of at least 10 years. We prefer to have a government organisation as a tenant. And our investment sum is preferably more than EUR 20 mln.' Other German investors with closed-end funds that are active in the Netherlands include Wolbern Invest, Nordcapital, Lloyd Fonds and MPC Capital.
German interest in Dutch real estate stems from its strong track record, according to managing director Ali Arnaout of MPC Real Estate. One of the attractions of the Dutch market is that it is so transparent and compact which means investors can do a tour of the assets in one day and come to a deal quite quickly. And because German closed-end funds are partly financed by German lenders, they can obtain a loan under more favourable conditions than in the Netherlands. ‘We have always done good business in the Netherlands, both with buying and selling,’ notes Arnaout. The fund manager’s most successful deal so far has been the sale of the Tasman portfolio to Breevast/AIG for some EUR 1 bn in 2006. MPC currently manages 19 real estate funds in the Netherlands, comprising 52 assets and representing a value of EUR 1.2 bn.
The growing presence of German financiers in the Dutch market is closely tied to German investors’ strong appetite for Dutch real estate. Following the collapse of the equities market, the German real estate funds saw greater capital inflows and that trend is ongoing.
German financiers are also very active in the Dutch market. Berlin Hyp and Deutsche Hypo both moved up two notches in 2009 in the annual ranking of leading property financiers in the Netherlands compiled by sister publication PropertyNL. The ranking, which is based on lending volume over 2009, is headed by ING Real Estate Finance with EUR 5.9 bn.