This website uses cookies to remember your personal preferences and gather statistics. Click here for more information about cookies.

Yes, I agree No, I do not agree X

Annual Reports 2017

The Edge, New York, United States
Bouwinvest Real Estate Investment Management B.V.

Het Hof, ’s-Hertogenbosch, The Netherlands
Bouwinvest Dutch Institutional Residential Fund N.V.

Damrak 70, Amsterdam, The Netherlands
Bouwinvest Dutch Institutional Retail Fund N.V.

Hourglass, Amsterdam South Axis, The Netherlands
Bouwinvest Dutch Institutional Office Fund N.V.

Message from
the Chairman

Bouwinvest Real Estate Investment Management can look back on a good year. We recorded a return of 12.4% on our portfolio as a whole, excluding currency results. This marked the third year in a row that we have recorded a double digit return. And last year, both our Dutch funds and our international mandates made a significant contribution to the good returns we booked in 2017.

Of course, the favourable value developments we saw worldwide had a positive impact on our returns. Growing economies, primarily in urban areas, and low interest rates boosted the demand for real estate investments across the globe. This means that the relative return for the portfolio as a whole, or in other words the return compared with the market average, is therefore also a relevant yardstick for our performance. This relative return was well above the market average measured over the past five years.

In terms of assets under management, what we have seen most of all is growth in the interest per client, partly due to the fact our clients are expanding their investments to other real estate sectors. So what we are seeing is the steady increase in diversification in our clients’ real estate portfolios. And that diversification strategy is paying off, due to the fact that the various real estate sectors are in different phases. For instance, the Dutch residential market has been recovering since 2014, while the office market only showed signs of real recovery over the past year. We now have a total of 18 clients. To improve the up-to-date information supply to our clients, we launched our new Investor Portal in October 2017.

The increased global demand for real estate investments did translate into a marked increase in competition for the acquisition of new projects. Nonetheless, we managed to realise a total transaction volume of close to € 800 million, without making any concessions to our quality and return criteria. This result was due in large part to our long-standing relationships with partners and our extensive network of contacts, as well as our focused acquisition strategy in the various Dutch and international real estate sectors.

Last year, we expanded our investments in homes and student accommodation in Australia and the Netherlands, in offices in Western Europe and Asia, retail real estate in Asia, North America and the Netherlands, logistics in Europe and North America and healthcare real estate in the Netherlands.

In 2018, we will see even more institutional investments flowing into the various real estate markets. The forecasts differ, but there are hundreds of billions worldwide just waiting in the wings for lucrative investments. And those billions will find a home, so to speak, because the global population is growing and the likes of the urbanisation trend, technological developments, sustainability and economic growth will demand investments on a huge scale.

At the same time, all that glitters is not gold. For instance, transparency is not what it should be in all markets. Plus the pro-cyclical valuation risk is lurking on the horizon and a hike in interest rates could spoil the party. On top of this, (geo-)political risks remain a fact of life. And devoting attention to liveability is now crucial, certainly for a long-term investor like Bouwinvest. Poorly thought out densification could ultimately have a negative impact on the attractiveness of metropolitan areas and real estate investments.

Actually, the Netherlands is the world in a nutshell. Because, aside from transparency-related risks, our country is facing all of these risks. The prices for A1 locations have risen considerably and interest rates are still at historical lows. What is more, real estate investments via Fiscal Investment Institutions (FIIs) are now the subject of political debate and the pressure on Amsterdam and other major cities is increasing exponentially.

In short, the long-term fundamentals are looking good and offer enough opportunities. But we are also facing a number of challenges that we will have to take into account in 2018 and the years ahead.

Bouwinvest expects to increase its assets under management to more than € 13 billion by 2020, divided across 10 international core regions and six core sectors, namely residential, offices, retail, logistics, hotels and healthcare real estate.

To enable the growth of our Funds and mandates within the applicable laws and regulations, the number of employees at Bouwinvest will increase to 180 FTEs. We will of course face the challenge of the growing scarcity on the Dutch labour market, so it will remain vitally important to be an employer of choice. In its most recent employee survey, Bouwinvest emerged with a score of 8. In the financial sector, we were voted the best employer 2017/2018. However, in the coming period we will be devoting extra attention to issues such as office accommodation, efficiency and client focus, to reinforce our strong position on the labour market.

Finally, I would like to thank our clients for their trust in Bouwinvest, and thank our Supervisory Board for their constructive supervision. And, just as importantly: I would like to thank all our employees for their dedication, cooperation and efforts over the past year.

Dick van Hal, Chairman of the Board of Directors

Sectors and
Global Spread