The Van Veggel family is making waves with its European and US businesses in the wake of the Multi Development era. In an interview with PropertyEU, Hans, Bas and Tim van Veggel look back on Multi’s legacy and what it has meant for them personally and their current activities.
At Mipim this year, a familiar face in European retail development will be among the delegates converging on the Croisette in Cannes: Hans van Veggel, founder of shopping centre developer Multi Development Corporation.
The veteran mall developer, who sold Multi to Blackstone in a hostile takeover nearly 10 years ago, will not be alone – his sons Bas (43) and Tim (38), both active in the family business, will be in attendance too.
In an interview with PropertyEU ahead of Mipim, the three look back on Multi’s legacy and what it has meant for them personally, their current activities and the businesses they are rolling out in Europe and the US. They also explain how the family business is run, and what each brings to the table.
If anything, the Van Veggels have come back stronger since the Multi sale and now have a broader real estate footprint than a decade ago. The family business operates through a number of development and investment platforms (see below), active in sectors well beyond retail – the mainstay of the former Multi operations.
Their leading companies, developer ZOM Living, property manager ZRS and asset manager Stonebridge Investments, are all active in the multifamily space in the Sunbelt region of the US. Meanwhile, Amsterdam-based COD (Cradle of Development) has grown into a leading all-round developer in the Netherlands with several large area schemes to its name.
Timeless Investments is the family office and flagship vehicle through which all investments – both real estate and other – are made. Set up to safeguard the family interests following the Multi sale, it now serves as a catalyst of business activity.
Ironically, a positive side effect of the Multi sale was that it brought father and sons closer together in pursuing the same entrepreneurial goals. Previously, they had all been professionally active in their own ways. Hans, Bas and Tim are now active across different parts of the business and each has his own specialism. Says Hans: ‘We’re a trinity now. The Van Veggels now play a much more important role in the world – both within and outside real estate – than they did before 2013.’
Multi legacy
The strong comeback since 2013 is rooted in Multi’s success. With a track record of more than 200 shopping centres developed across 13 European countries (including Turkey) over the course of three decades, the company grew into an award-winning supplier of malls. Multi’s projects regularly served as the engine for revitalising a city or region and have been internationally recognised for their innovative nature, architectural quality and profound sensitivity to local environments. Recognition over the years has included numerous ICSC, ULI, Mapic and Mipim awards.
So, when Hans lost ‘his Multi’ to the ‘financial thinkers’ at Blackstone, the impact was huge. The US private equity giant gained control of the Dutch company after taking over its €900 mln of debt at steep discounts. Multi had run up the debt in pursuit of relentless expansion. The €900 mln loan had been granted by a consortium led by merchant bank NIBC (like Multi now also owned by Blackstone).
The hostile takeover by Blackstone led to a complete change within the company, recalls Hans. Architecture, which had been an important facet of the Multi development business, was ‘regarded as a hobby’ and ‘spreadsheets dictated what managers had to do’ instead of the other way round. The US firm wanted to turn Multi into an asset manager, and design and development no longer fitted in with that.
It was the moment that Hans thought: ‘To hell with it all’. Devastated by what he perceived as the demise of his company, he disappeared off to Portugal, leaving Bas to settle the family interests in London. Bas remembers his father’s disappointment vividly: Hans was so desolate he couldn’t even muster up the energy to negotiate his exit.
Diagnosing places
It was clearly a painful chapter in the family history. Although a book about Multi or a biography of its founder has never been published, if it ever does, it will have a ready-made title: ‘The power of diagnosis’.
The son of a doctor, Hans sees ‘diagnosis and the treatment of what he sees’ as his particular strength. ‘You can’t study to be a developer. You have to have a certain feeling or talent for it, which is honed further in practice. My father was trained as a doctor, but he also had that gift of making a diagnosis and then seeing what had to be done, what treatment had to be given. I learned from him that it is not so much about the training, but about the diagnosis. I think I am good at diagnosing places and seeing what is necessary.’
He continues: ‘It’s about what you do with the diagnosis, how you convert it into a treatment, what plan you make for a location, how you create something that improves the place, how you restore and transform it by adding and mixing elements, creating something that goes beyond the place itself.
‘Project development can be learned in practice, but the essence is the diagnosis of the place and subsequently how you deal with it; it comes down to feeling and conceptualising something based on the context and culture of the place, seeing the potential and scope which most people miss.’
An example of his diagnostic skills is the Beurstraverse in Rotterdam, an underground shopping precinct linking two high streets which ‘repaired’ the split heart of the war-bombed port city. Opened in 1997, the revolutionary project will celebrate its 25th anniversary this year.
These days, Hans, who resides mostly in Portugal, is still busy ‘diagnosing’ places and coming up with new ideas for projects. During the interview, he excitedly shows on his phone how he wants to ‘make a Portuguese housing project better’.
Says Hans: ‘My work is always my hobby. You must have fun with it. Otherwise, you should do something else right away. Within every company you need different types of people. For example, you should always put a good CFO next to an entrepreneur. But never make a CFO the boss. You see that many large companies are run by purely rigid financial thinkers. In general, this means that creativity and entrepreneurship suffer. Look at what happened to ABN Amro. With only rigid financial people things go downhill quickly.’
Because Hans is no longer fully involved with running a development company, he has room for another hobby: art. He is an avid art collector, especially post-war art, a love that his younger son Tim shares. Both siblings also share their father’s ‘urge to create’. In his drive to realise ‘beautiful buildings for people’, with a strong focus on quality and the environment, Hans cultivates close ties with architects and urban planners. He is close friends, for example, with world-renowned Dutch architect Rem Koolhaas, who designed the NHow hotel developed by COD next to the RAI congress centre in Amsterdam.
Different career paths
Although they had real estate development drummed into them from an early age (Tim: ‘We learned about real estate at the dinner table’), it was by no means a matter of course that Bas and Tim would follow in their father’s footsteps. Neither had aspirations to work for Multi Development Corporation as ‘the boss’s sons’. Says Bas: ‘Multi was already too far advanced for us to make a start there.’
After graduating in business administration, Bas worked as an intern at investment bank Kempen & Co and Dutch investor, Urban Interest. ‘It’s good to take a look at another company,’ says Hans, who himself gained experience at MAB, developer of projects such as MyZeil shopping centre in Frankfurt, the massive Oosterdokseiland mixed-use project in Amsterdam and office building The Resident in The Hague.
Bas now concentrates mainly on Timeless’ Dutch platforms COD and B. Amsterdam, working in strategic partnerships with other local developers like Being Development. COD is owned on a 50-50 basis by Timeless Investments and Borghese Real Estate, another privately run business held by the Pleijsier construction family.
Despite their different backgrounds and networks, the entrepreneurial blood of the two families, plus a shared passion for development, has proved a successful business formula for more than 10 years. ‘As was the case at Multi, it’s all about the people,’ says Bas. ‘COD started up in a difficult period and took a long time to get going. It now has several projects to its name and is known for the NHow Amsterdam RAI Hotel and various area developments such as SPOT, Hamerkwartier, Schinkelkwartier and Megastores.’
Although Tim dreamed of becoming an architect as a child, he eventually opted for the world of corporate finance with stints at Morgan Stanley and accountancy firm Deloitte. Says Hans: ‘He’s a financial whizz kid, but that also requires perseverance.’
Within Timeless, Tim now focuses on the three US businesses, private equity and strategic real estate deals, such as the 2015 acquisition of the Generali portfolio in the Netherlands together with London-based Tristan Capital Partners, which has resulted in a successful partnership.
Business by consensus
The three Van Veggels say they take business decisions ‘by consensus’. Each knows what the other is up to, and has strong views on projects and parts of the business they are not directly involved in. When Hans elaborates on property investments in Asia, for example, Tim says resolutely: ‘We don’t do that anymore. We’ve learned our lesson as a minority partner in remote real estate. If we invest in property now, we do it ourselves, hands-on. We do, however, operate more broadly now and have grown strongly in private equity participations outside the real estate domain.’
Conversations with Hans revolve much less about money and risks, although that is an important part of the development game. ‘I am risk averse,’ he says. ‘If I can’t oversee things, I won’t do it.’ That seems implausible, given the mountain of debt that piled up at Multi during its heyday as a result of its growth aspirations. Yet on a personal level, Hans came through the Multi years financially unscathed, even in the disaster year of 2013 when Blackstone took control of the company.
The seasoned entrepreneur never put all his eggs in Multi’s basket. Because the company focused on Europe, privately, Hans also invested money in the US. He took a stake in housing developer ZOM Living, initially in Florida, but later also in other American states. That investment has paid dividends, and Hans and Tim now fly to the US at least four times a year. Says Bas: ‘If there’s a party, I tag along too.’
Hans and Tim are happy that the idea of design and development has now also made inroads in the US. Says Tim: ‘ZOM is a real American development company active in the Sunbelt.’ Adds Hans: ‘It is led by Greg West, a fantastic Texan. He does a good job, but has little affinity with design: why do something different to the neighbours if it still sells well? We introduced concept architects Jan des Bouvrie, Axel Vervoordt and Willem Joost de Vries to him.’
Tim explains: ‘We have a lot of contact with the American management. We are now expanding to Phoenix, Arizona and are developing senior housing as well.’ Hans is particularly proud that ZOM recently received an award as the best rental property developer in the US, thanks partly to its striking architecture. After all those years, it is a vindication of the old Multi approach.
Hans’ departure at Multi may have been a blow to the sector at the time, especially for young talent which lacked a figurehead and source of inspiration. But in hindsight, 2013 has turned out for the better for the Van Veggel family.
‘Blackstone has had very little benefit from its hostile takeover,’ says Tim, referring to a string of Multi shopping centres in Turkey that appear unsellable in the current political and economic climate in that country. For its part, Timeless is living up to its name, and, as the business rolls on, the Van Veggels are certainly not looking back.
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Van Veggel platforms
Timeless Investments
Timeless is the family office and flagship investment vehicle of the Van Veggel family. Besides a substantial real estate and private equity investment portfolio (around 30% is non-real estate related), the company invests in its own companies and platforms.
ZOM Living and ZRS Management
ZOM Living was founded in 1977 as a developer of American rental housing complexes. It was subsequently taken over by Hans van Veggel and Daan Dura, whose interest was later acquired by Dutch investment manager Bouwfonds. After Bouwfonds divested its foreign activities in 2010, ZOM came entirely into the hands of Timeless and the business model was changed. The company has realised $4.5 bn (€3.9 bn) of homes (23,000 units) since inception, and now has a development portfolio of more than $3 bn and 8,500 rental properties, some of which is senior housing. The management arm, ZRS Management, which is affiliated with ZOM and also owned by Timeless, now has 60,000 units under management.
Stonebridge Investments
Stonebridge is an investor-manager of existing rental properties in the US, based in Washington DC and Amsterdam. The Van Veggel family leads its investments and facilitates co-investment on behalf of its network of entrepreneurs and family offices in the Netherlands. With a track record of $500 mln of successfully sold projects, the company has recently grown strongly with $600 mln in assets under management across 12 rental housing complexes.
COD
In partnership with the Pleijsier family, COD has grown into one of the largest real estate developers in the Netherlands, with various high-profile (area) developments under its belt. One of its signature buildings is the Nhow Amsterdam RAI hotel, located near the same-named congress centre in the Dutch capital.
B.Amsterdam
- Amsterdam was created in 2013 by transforming the structurally vacant former IBM office into a start-up hotspot in Europe. It is conceived as a ‘city within a building’ where events, catering, sports and work come together, led by young people.The B.Amsterdam concept also targets scale-ups and corporates. Currently, it consists of three buildings and a logistics smart city hub comprising a total 63,000 m2 in Amsterdam. Next year, B@home (330 co-living units) will be created on the site and developed by COD.
