Dutch insurer Delta Lloyd is considering selling off its €2.2 bn direct real estate portfolio in a bid to bolster its solvency ratios ahead of the implementation of new European capital reserve requirements.
Dutch insurer Delta Lloyd is considering selling off its €2.2 bn direct real estate portfolio in a bid to bolster its solvency ratios ahead of the implementation of new European capital reserve requirements.
During the presentation of the company’s first-half earnings results last week, CEO Hans van der Noordaa said Delta Lloyd was looking in particular at disposing of its office and retail assets, which include the Brusselse Poort shopping centre in Maastricht, the Mondriaan office tower in Amsterdam – which houses Delta Lloyd's HQ – and shopping centre De Ridderhof in Ridderkerk.
Under the new European Sovency II regulations which are due to be implemented in 2016, insurers are required to maintain a 25% capital buffer for losses which may result from risky investments and commercial real estate falls within this category.
Delta Lloyd announced last year that it planned to abandon its long-pursued strategy of investing directly in real estate, a step taken previously by many of its Dutch institutional peers which had shifted their property holdings into funds.
The reaffirmation of its pullout at the results presentation last week comes at a time of intense interest in Dutch real estate among foreign investors in their search for quality product.
Of Delta Lloyd’s portfolio which was valued at €2.2 bn at end-2014, 69% is located in the Netherlands and the remainder in Germany and Belgium.
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