Investors’ focus on core assets is slowing the Dutch market down, delegates heard at Real Asset Media´s Netherlands Investment Briefing, which took place online on the REALX.Global platform earlier this week.
¨Supply of product is very low at the moment despite the abundance of liquidity in the market,” said Rogier Bos, Real Estate Finance Benelux, Berlin Hyp. ¨The problem is that everyone is looking for core product, but the owners of core assets are not keen to sell them, so the market is less active than it was last year.”
Liquidity is there, from the investor as well the banking side, but buyers are being more selective on location and type of asset.
¨There are a lot of challenges to be overcome, including the health crisis which may not be over, and that is why the market is quieter now,¨ said Peter Helfrich, managing partner, Primevest Capital Partners.
There are more willing buyers than willing sellers and that explains the slowdown in activity. When good assets or portfolios come to the market, though, there are plenty of investors keen to make an offer.
¨There are good opportunities out there, but investors have become more picky and selective, they do a lot of due diligence and they prefer an income play like resi or convenience retail,” said Jaap van der Bijl, CEO, Altera Vastgoed NV.
The market is becoming increasingly polarised between core assets in good locations and grade B or C stock. Grade A assets must be sustainable, as all investors now take the green factor into account.
¨Sustainability, wellness and a well-connected location are all crucial aspects now,” said Tia van Beek, director transactions, the Netherlands, Principal Real Estate Europe. ¨We bought the Helix office in Utrecht before Covid-19 struck, but it proved to be pandemic-proof because it is easily reachable by public transport, has pleasant surroundings and adaptable floorplans.”
Awareness growing that time is running out for ESG
The Netherlands was a pioneer in taking ESG issues on board, but even here there is a growing awareness that time is running out.
¨It is only 100 months until we get to Paris goals, so it´s all hands on deck,” said van Beek. ¨Everyone should be aware of what needs to be done. ESG should be embedded in the asset management, an integral part of everything we do.”
The countdown has started to comply with the Paris Agreement targets and compliance is a must to get to net zero.
¨Around 99% of existing stock needs intervention, so there should be more subsidies to incentivise and finance the transition,” said Helfrich.
Private lenders are stepping in and playing their part. Berlin Hyp has three targets on ESG. The first is to have a ⅓ green portfolio by 2025, the second is to have more transparency on CO2 output and the third is to offer client transformation loans to make brown buildings green.
¨Investors must have a clear business plan and a budget to make the asset sustainable in order to get the loan,” said Bos. ¨It is quite a leap to make. We have a €23 billion loan book so we can make a real contribution towards positive change¨.