NETHERLANDS – Dutch regulators are probing institutional investors’ real estate investment activities to detect corruption.

The moves come from the central bank, the DNB, and market regulator the Financial Markets Authority (AFM).

Following various scandals in the real estate sector over the last few years, DNB has announced in its annual report it wants to investigate if institutions – such as pension funds and insurers are "knowingly or unknowingly" being used for the improper activities of others.

The bank says it has been in talks with the sector since the end of last year to get an insight into its real estate investment and management activities. DNB declined to give more details about the specifics of the investigation.

DNB executive director Dirk Witteveen said earlier this month that he expects the investigation to be concluded this autumn.

Sine last autumn, the DNB has already been investigating all non-listed real estate funds. These carry more "integrity risks" because they are less transparent than the listed funds, according to the regulator.

Therefore, it is currently looking at the investment activities of four unnamed pension funds and two insurers, who all have a substantial allocation in the form of direct and indirect investments via unlisted variant.

Also it is looking at the real estate financing of four banks, a spokesman told IPE.

AFM said it would continue probing so-called sleeping real estate partnerships, which have come under scrutiny last year in a critical report about this investment form.

The DNB spokesman said that AFM and DNB are not directly working together, "but we always keep each other informed of course," he added.

The Dutch association of institutional property investors (IVBN), which told De Telegraaf that it already knew of DNB’s initiative, commenting that transparency is not a problem for its members.