ING Real Estate shifts focus to major area development

ING Real Estate has redrawn its business strategy to focus principally on major regeneration projects in cities. Until now, the development arm of the Dutch property company has undertaken both small-scale and large-scale area development schemes.

Speaking during a briefing at the Mapic retail real estate fair in Cannes on Thursday, Menno Maas, CEO Development, said that the change in ING Real Estate´s approach to area development schemes addresses wider issues associated with both large-scale regeneration and the wider community. 'All area development schemes are major undertakings which involve vast resources - both financial and physical - a wide array of skills, and a long-term commitment to the project.'

Maas said it was clear that this sort of scheme would not appeal to lots of investors and developers who preferred shorter projects and more readily predictable budgets and cash flows. 'However, for an organisation such as our´s the opportunity to become involved in projects which literally regenerate entire areas of our cities and form the backbone of those local economies is extremely exciting'.

ING Real Estate used the briefing at Mapic to launch its book entitled 'The Fifth Dimension - the Art of Area Development'. The book looks at the evolution of the development business in the UK, and charts the history of the urban regeneration phenomenon. According to the book, the concept of area development represents a shift away from traditional zoning and limited development strategies. The need for a 'clear and holistic vision' for regenerating huge slices of cities was first recognised in the UK in the 1980s as traditional industries, like coal mining and shipbuilding, began to change or close down completely.

It is now understood, according to the book, that there is a need to recreate the public's faith in an area as a new and vital part of their community. Rather than targeting an end-user or investor, area developers might have to work with a vast array of public and private stakeholders for years or even generations to ensure the job was done properly. 'And this is what excites us,' Maas said.

ING Real Estate is involved in about a dozen area development schemes in the Netherlands, Belgium, the UK, Germany, France, Hungary, Poland and Australia. For instance, the flagship 2.7 million m² Zuidas (South Axis) mixed urban centre development in Amsterdam - which includes a new train station, offices, apartments, shops, public buildings and other amenities - will rival Canary Wharf in London and La Defence in Paris, ING Real Estate said.

ING RE currently has 230 projects under development with a value of about EUR 9 bn, Maas said. About 35% of the pipeline comprises retail projects, with residential accounting for another 30% and offices and other real estate making up the remainder.