Dutch rental dwellings increasingly popular with international pension funds
29 januari 2018
In the past five years, international investors have purchased more than five billion euros of Dutch rental housing. In 2017 they invested around 950 million euros. For 2018, international investors indicate that they have more than 2.5 billion euros available for investments in Dutch rental housing. More and more international pension funds want to purchase Dutch rental housing.
The most important reasons are the attractive risk-return profile, low interest rates and the growth in the number of households in the Netherlands. Most investors are from Germany, North America and England. This is one of the first results of the annual survey by Capital Value into the developments in the Dutch residential investment market. The results will be made available on 5 February 2018.
Number of international investors is increasing
In 2011, the first transaction was made by an international investor in the Dutch housing market. According to current data, more than 20 large international investors are currently active on the Dutch housing market. New parties joined the Dutch market in 2017 as well. It is expected that in 2018 more new funds will start investing in Dutch rental housing, including investors from Asia, who have been looking into the Dutch market for some time now.
More than 40,000 rental properties sold to international investors
Since 2011, international investors have bought more than 40,000 rental properties in the Netherlands, according to the Capital Value survey. This concerns both existing dwellings and, increasingly, new-build developments. For example, international investors were the first to be very active in the acquisition of micro-apartments in the big cities. In the field of healthcare real estate, too, a number of specialized foreign funds are active on the Dutch market.
Most international investors invest for pension funds
The Capital Value survey shows that 88% of investors work with pension fund money. The majority work with an investment term of 5 to 10 years. 21% have an exploitation period of more than 10 years. In 2017 one fund sold its entire portfolio and left the Dutch market. This concerned an investor who worked with private equity. Many investors have set up a Dutch organization in recent years or have appointed a Dutch asset manager to manage the portfolio. Almost all international investors work with Dutch managers for technical maintenance and operation.
For 2018 more than 2.5 billion euros available for new investments
The investors surveyed indicate that they will have more than 2.5 billion euros available for new investments by 2018. Together with Dutch investors, international investors can make an important contribution to reducing the shortage of rental properties. International funds are often complementary to Dutch investors. Approximately 30% indicate investing exclusively in middle-priced non-regulated rental dwellings. Approximately 70% indicate that they want to invest in regulated rental dwellings and in middle-priced non-regulated rental dwellings. In addition, international investors invest more in older complexes than do Dutch investors; they are interested in larger volumes and have experience in new segments such as care and micro-dwellings. For healthcare real estate, international investors will have around 350 million euros available in 2018.
Marijn Snijders, Capital Value director: "It is good for the Dutch housing market that a growing number of pension funds are becoming active on the market. They often work with a long-term vision and can therefore accept lower returns. As a result, investments can also be made in the quality of the housing and in housing for new target groups. Also, international investors often have a lot of knowledge and experience with investments in housing for special target groups, such as young professionals and the elderly."