Patrizia enters Dutch market, residential poised for recovery
The Augsburg-based listed Patrizia Immobilien AG continues to break new ground in Europe – this time in the Netherlands, where it paid €578m to buy about 5,500 apartment units from the Vestia housing association. This is the biggest transaction ever seen on the Dutch housing market.
The broadly-diversified portfolio has 340,000 sqm of lettable space, mainly located in and around Vestia’s domestic heartland of Rotterdam and the Hague. The vacancy rate is 3%, while 70% of the apartments have rental protection clauses.
The huge package will be allocated to Patrizia’s co-investment “Wohn-Modul 1” fund, a partnership with an as yet unnamed German pension fund. The Vestia team will be taken over by Patrizia and continue to manage the assets. Patrizia only opened its first office in the Netherlands three months ago, and hired Peter Helfrich from CBRE Global Investors to head up its Dutch operations.
According to Klaus Schmitt, COO and board member at Patrizia, “We’ve been enjoying a lot of trust from our institutional investors for quite some time now – so much so that they’re happy to join us in cross-border transactions.”
After a rocky period since 2007 which has seen sharp price declines, the Dutch residential market is starting to recover, and investor groups are again being wooed to invest in the market. The demographics are good, with the population rising slowly across all regions through the next two years, so housing demand can be reasonably predicted. Rents have remained stable, and vacancy rates have barely budged. Structural changes are also contributing to the market’s attraction, such as improved tax breaks for owners and stricter criteria for qualifying for subsidised housing – measures which should underpin the private housing market.
German institutional investors made their first big move for a while earlier this year when BNP Paribas REIM Germany teamed up with Amvest in a €40m deal to buy 265 Dutch apartments in the Randstad district on behalf of the Luxembourg SICAV of a German pension fund. Munich-based Catella Real Estate is also bringing out a Dutch residential product for German investors later this year.