German investor Patrizia Immobilien is switching its strategy for the Dutch residential market from buying existing homes to investing in the development of new stock to circumvent the shortage of product.
German investor Patrizia Immobilien is switching its strategy for the Dutch residential market from buying existing homes to investing in the development of new stock to circumvent the shortage of product.
Patrizia entered the Dutch real estate market last year with the €578 mln acquisition of the Vestia portfolio – the biggest housing deal ever in the Netherlands. The company had planned to invest in all asset classes on behalf of its pension fund, insurance company and SWF clients. But lack of available institutional-grade product has forced it to adjust its original strategy, Patrizia’s Dutch director Peter Helfrich said in an interview with PropertyEU.
‘The lack of residential product in the market has been disappointing,’ he said. Dutch housing corporations, the key potential vendors of existing stock, are failing to sell or are selling mostly to one another, thereby undermining government moves to deregulate the sector and open it up to foreign capital. ‘The corporations do not appear to be selling any further major portfolios. I’m disappointed that things are moving so slowly,’ Helfrich said.
To get around the problem, Patrizia now plans to invest in the development of new stock. It has already signed an agreement with the authorities in The Hague under which it has committed to invest in at least 150-200 new homes a year. Helfrich also sees opportunities for this model in other Dutch cities, particularly in the housing segment with rents between €600 and €950 per month. ‘We’re not planning to develop ourselves, but will work with sub-contractors. A key condition is of course that the demographics are favourable and that the product is sustainable, innovative and of good quality.’
The role of investor-developer is not a new one for Patrizia. The Augsburg-based company started out as a developer in Germany before evolving into a long-term investor. ‘The company has a superb track record in this area, it’s a game it understands extremely well,’ said Helfrich.
Marcus Cieleback, head of research at Patrizia Immobilien will be one of the contributors during the briefing, organised by PropertyEU, on European residential investment at the Provada Real estate fair in Amsterdam on Tuesday 2 June
See also our Special Report on the Dutch market in the June edition of PropertyEU Magazine