HIG Capital hunts for more - preferably distressed - Dutch assets

US private equity firm HIG Capital is keeping a close eye on the Dutch market for further deals following the acquisition in early November, through its affiliate Bayside Capital, of a portfolio of 12 light industrial properties.

‘We are looking in particular at portfolios which are in trouble or funds, even German ones, which are in the process of being liquidated, causing Dutch assets to come to market at a lower price,’ Ahmed Hamdani, managing director of Bayside Capital, told PropertyEU. Besides logistics, the firm is also looking at offices and hotels. ‘We see a number of investment opportunities in the coming year,’ Hamdani said.

Bayside Capital is an investment firm with approximately $4.5 bn under management across several segments of the primary and secondary debt capital markets with an emphasis on long-term returns.

In its latest Dutch deal, the firm purchased the 12-asset industrial portfolio from Valad Europe for around €50 mln. The assets were acquired by MBay Light Industrial, a joint venture between Bayside Capital and specialist asset manager M7 Real Estate which targets high-yielding multi-let industrial assets in the Netherlands.

The properties comprise a total leasable area of around 110,000 m2 across 234 units and are let to tenants including ING Bank, clothing wholesaler Veldhoven International, care organisation Welzorg Nederland and Reasonnet. Six assets are located in the greater Amsterdam area, with the remainder located in Alphen aan den Rijn, Breda, Drachten, Leeuwarden, Rotterdam and Vianen. ‘This transaction demonstrates HIG’s continued commitment to the Dutch market and to growing its European real estate and NPL business further,’ Hamdani said. 'We are closely monitoring the market to take advantage of similar opportunities when they become available,' Sanjoy Chattopadhyay, director at Bayside Capital, added.

Commenting on the deal from the vendor side, Mark McLaughlin, managing director for the Benelux at Valad Europe, said: ‘Under the current challenging circumstances, it is just as important to be able to trade properties at the right moment as it is to acquire them at the right price. We are very pleased that we were able put together a portfolio from three of our mandates which meet the investment criteria of the MBay joint venture.’

Starwood European Real Estate Finance, a unit of US private equity group Starwood Capital Group, provided €21.8 mln for the transaction in its first-ever Dutch financing deal. Starwood European Real Estate Finance is a closed-end investment fund registered in Guernsey with a reputation for targeting distress. It mainly targets non-convertible loans and heavily discounted loan portfolios in Europe, particularly in Ireland, the Netherlands and Scandinavia. These are markets, according to Starwood, where local banks still have to write down heavily on their real estate loans.

In its first-half 2013 report, Starwood points to opportunities for gaining a foothold in a number of European countries as a result of the impending introduction of the Basel III banking regulations which will make local banks more reluctant to lend to real estate.

Based in Miami, HIG is a global private equity investment firm with more than $13 bn of equity capital under management.