Kroonenberg acquires major retail portfolio from Philips Pension Fund

Dutch property company Kroonenberg has acquired a retail portfolio from Philips Pension Fund in the largest retail property transaction in the Netherlands this year. While both parties and their advisors did not reveal the transaction price, market sources suggested it was in the region of EUR 400 mln.

The portfolio comprises 67,000 m² of retail space, about 20,000 m² of office space, 270 apartments and four parking garages. More than 80% of the assets, including two major shopping centres, are in Amsterdam. The other properties are in Rotterdam and Eindhoven.

CB Richard Ellis, which advised Philips Pension Fund, said the Kroonenberg Group carried out the transaction as part of its strategy to expand its holdings in key retail areas in the Netherlands. The buyer owns shopping centres in the Dutch cities of Breda, Hilversum and in the Rotterdam-Hoogvliet region. Epac Property Counselors, Houthoff Buruma and law firm Lexence advised Kroonenberg.

The sale was the result of a tender process organised by CB Richard Ellis and Loyens &A Loeff. Institutional investors were reportedly interested in buying parts of the pension fund's real estate portfolio but dropped out at the last minute when the fund found itself at the centre of an investigation into allegations of corrupt direct investment real estate deals in the Netherlands.

Neither the pension fund nor its property arm, Philips Real Estate Investment Management (PREIM), are accused of wrongdoing, but the former head of PREIM, identified by the police only as Will F, is suspected of earning EUR 11 mln from corrupt property transactions. He was among a group of 16 people arrested last month in police raids on 54 premises in the Netherlands, Switzerland and Belgium. The chief suspect, Jan van V, the former director of Bouwfonds Development, is suspected of pocketing EUR 64 mln.

Dutch real estate investment fund Vesteda acquired just over 1,000 homes from Philips Pension Fund earlier this month. The assets were valued at more than EUR 200 mln and generate EUR 600 to EUR 1,000 rent each a month. This was Vesteda's largest acquisition to date and it now owns 27,000 private-sector homes.

The sale was the first step in a strategic move by Philips Pension Fund to withdraw from direct real estate investment. The homes sold to Vesteda accounted for 20% of the pension fund's direct real estate portfolio. The pension fund indicated it expected to sell the rest of its residential property assets before the end of December.