The Office Fund’s strategy is to optimise its portfolio through targeted acquisitions and continuous enhancement of core assets.
The Fund’s strategy focuses on office properties that currently generate predictable and stable returns and will continue to do so in the future, taking into account the trends and development in the office market. In addition to this, the Fund’s strategy is focused on active asset management to optimise the portfolio and keep it as future-proof as possible. Based on the market trends and developments described above, the Fund’s strategy focuses on:
Core regions and property in A locations. The Funds' core regions closely correlate with the trends towards urbanisation and a knowledge-based economy. In 2017, the core region policy was tightened in such a way that only Amsterdam, Rotterdam, The Hague and Utrecht are now considered core regions. At least 80% of the Fund’s investment will be in its defined core regions. The Fund has a preference for inner city areas.
Multifunctional locations. Good retail, residential and leisure facilities play a major role in the appeal of (business) meeting places. Locations where a widely diverse group of people come together form a good basis for an inspiring working environment. The blending of culture, education, sport and work makes a positive contribution to this environment.
Multi-tenant assets. This type of exploitation may reduce the volatility of revaluations and could increase the control of asset management risks, thanks to multiple lease agreements with different expiry dates and debtors.
This type of exploitation may reduce the volatility of revaluations and could increase the control of asset management risks, thanks to multiple lease agreements with different expiry dates and debtors.
In 2017 a multi-tenant asset has been defined as follows:
the two largest tenants/ leases account for a maximum of 80% of the total rental income at asset level; and
the largest tenant/ lease accounts for a maximum of 75% of the total rental income at asset level;
vacancy is considered to be let to multiple tenants.
Reporting of multi-tenant assets will occur according to this definition as of 2018.
Enhancement of core assets. Every asset needs a distinctive character to outperform. Good accessibility, technical condition and parking spaces are no longer sufficient. To create a special building proposition, the focus will be on increasing comfort for users and providing an attractive environment that is seen as an appealing (business) meeting place. An office may be special, for instance, because of full service concepts devised to provide tenants with a high level of service or due to the building’s history.
Sustainability. We believe that green buildings can help combat climate change, as well as achieve numerous other wider social, economic, environmental and health benefits. Acting responsibly is therefore an integral part of the Fund’s investment strategy and we are certain it lowers risks, increases returns and increases lettability.
Occupancy rate. Close relationships with tenants enables the Fund to propose lease extensions at the right time. Partnerships with property managers and (local) real estate agents are important. New lettings may also result from close cooperation between (local) government organisations, foreign investment agencies, etc. Maintaining and expanding our networks is an ongoing activity. Sometimes, property upgrades are necessary to support or improve a competitive proposition. These always take sustainability into account.
The Fund applies a defined set of Investment Restrictions in the execution of its strategy. The Fund will adhere to the following Investment Restrictions to focus on its core activity and to limit risks. In the Fund Plan 2018-2020 the diversification guidelines have been slightly expanded.
(*) The total value of investment property and investment property under construction in the Fund is € 596 million, so the restriction is not yet applicable.