Investment Manager Patrizia has been active in the Dutch housing market since 2014. This German investor has previously acquired a substantial portfolio from Dutch housing corporation Vestia. Peter Helfrich, Managing Director of the Dutch branch of Patrizia, has set his sights on the Dutch housing market.
Patrizia is listed on the German stock exchange and has also been investing in other European markets since 2011. “We started off by investing in France and the UK, among other countries, and added the Netherlands in 2014,” says Helfrich. The Dutch market was a logical next step for Patrizia. “The Dutch market attracted our interest for a number of reasons. First and foremost, it is a mature real estate market. It is also located close to Germany and there are numerous commonalities between the countries. And the acquisition of the Vestia portfolio has also enabled us to take major first steps.”
For Patrizia, a local platform is essential with foreign investments, admits Helfrich. “Our motto is that you can only invest successfully in a foreign real estate market if you have a local platform. This means having a local staff who knows the market and how networks are interconnected. Before Patrizia could make its first purchases, a local organisation needed to be established. We started in mid-2014 and now have a staff of twenty.”
This German investment manager is primarily interested in long-term returns and is focusing on the mid-priced rental sector. The portfolio also contains a large percentage of social housing. But the housing market is not the only interesting market in the Netherlands. “The housing market continues to be an important long-term business for us, but we also invest in other sectors, such as high street retail properties, as well as neighbourhood shopping centres anchored by supermarkets. Another focus is office buildings in the major Dutch cities. We have now invested a total of 1.2 billion euros in the Dutch real estate market, of which 65% is in housing. Our search scope for housing is quite broad: greater Randstad conurbation, urban region of Brabant and major cities in other provinces with healthy demographic and economic prospects.”
When Patrizia acquired the Vestia portfolio in 2014, there was a considerable amount of scepticism, especially among tenants. A foreign investor taking over a major percentage of the Dutch market caused quite a bit of uncertainty. “I think those concerns have proven to be unfounded,” says Helfrich. “Tenants have probably not noticed much difference since we outsource daily operations to MVGM Vastgoedmanagement. This means that tenants do not have direct contact with us, but the MVGM staff. Obviously, we are a market player with financial objectives, so there have been rent increases, but like a housing corporation, we too must comply with regulations for the maximum permitted rental amount according to the rent regulations.”
“We have a good working relationship with the municipalities. When we acquired the Vestia portfolio, we met with various aldermen in order to introduce ourselves as a new local party. Thanks to those introductions, the municipalities know who we are, making it easier to do business. So we have very few complaints when it comes to the goodwill of the local authorities.”
Helfrich believes that investing in the Dutch housing market can also be of interest to other foreign investors. “A real estate market is interesting for long-term investments if there is economic and political stability with a transparent and liquid real estate market. In terms of transparency, the Netherlands ranks among the top 10 in the world. Transparency refers to transaction processes, legal and administrative framework, whether there is enough long-term reliable data available and/or whether consistent measurements can take place. This makes it possible for foreign parties to achieve reasonable and sustainable returns in the long term in the Netherlands, and hopefully this will continue to be the case.”