Strategic partnership for investing 280 million Euros in Belgian affordable housing
ASSET MANAGEMENT
Institutional asset managers Bouwinvest Real Estate Investors and CBRE Global Investment Partners (CBRE GIP) have entered into a strategic partnership with developer ION. Together, via ION Residential Platform (IRP) they are to invest 280 million Euros in one thousand affordable new-build houses and apartments exclusively for the rental market. An initial investment capacity with the expectation that this may increase over time. It is reported in De Tijd that the intention is to invest the entire amount within three years.
IRP aims to become a reference among tenants by offering high quality and professionally managed homes. The platform’s sustainable projects will actively contribute to a more climate-friendly housing market.
The creation of this Belgian investment platform in residential real estate follows a major trend: the evolving demand in favour of more rental housing, less ownership. Approximately 72% of Belgians are currently home-owners. However, research shows that this number will decrease considerably over the next decade. Steven Trypsteen, economist at ING, underlines this trend following a study carried out by ING on the expectations of experts in the sector: “More and more Belgians are turning to rental and ownership is clearly under pressure. Experts expect that this will drop to 65 percent by 2030, the level of 1995.”*
This means that tens of thousands of additional Belgians will rent a home instead of owning one. The number of homeowners is already below 55% in major cities such as Brussels, Antwerp, Charleroi, Ghent, Liege and Leuven. A downward trend is particularly noticeable in new buildings and in the suburbs. This turnaround may also be partly explained by a change in mentality. Many young people change jobs frequently and travel more often. The purchase of an owner-occupied home is for them less of a priority or is postponed.
Investment strategies
Bouwinvest Real Estate Investors manage a total of € 12.9 billion in various property sectors. On behalf of 25 institutional investors (pension funds and insurers) they have been investing capital for years in affordable homes in the Netherlands, where there is a structural housing shortage, especially in the mid-rental segment. Their asset managers now want to do the same in Belgium, and their first real investment in Belgium will be undertaken via the IRP platform.
Jasper Petit, Senior Portfolio Manager European Investments at Bouwinvest, explains their investment strategy: “Affordable housing as an asset class offers an interesting opportunity to create value in both financial and social terms. The fundamentals for this investment are strong due to ongoing urbanisation and a growing housing shortage in urban areas. We are keen to expand our investments in this segment given the sustained demand and lower risk level.” Where social benefits are concerned, the company underlines that their asset management contributes to sustainability, liveability and accessibility in the urban environment and the improvement of pension benefits in the retirement plans of their clients. In this way they create social and financial returns.
CBRE Global Investment Partners, a division of CBRE Global Investors, delivers investment solutions customised for clients’ individual objectives by constructing portfolios using private funds, secondaries, co-investments and joint ventures, partnering with leading operators and fund managers for each strategy. CBRE GIP has $34.9 billion in assets under management, some invested in Belgium but not yet in the residential segment.* Line Verroken, Senior Investment Manager, at CBRE GIP comments on their investment strategy: “Providing affordable and high-quality sustainable housing is one of our key objectives and preferred investment strategies throughout Europe. This investment will allow us to play into that strategy in a defensive market with very strong long-term fundamentals. “
Both giant international investors have decided to partner in a joint-venture with ION for many reasons. In recent years ION, founded by Davy Demuynck and Kristof Vanfleterenis, has developed some 30 projects with a total value of 650 million Euros. The developers’ pipeline of more than 80 projects with a value of 2.4 billion Euros is clearly attractive to these co-investors.* As expressed by Casper van Grieken, Head of CBRE Capital Advisors Netherlands: “We are convinced that the combination of Bouwinvest and CBRE GIP's global residential investment experience and ION's pipeline, sustainability knowledge and local expertise will lead to wonderful results. The Belgian residential investment market is very interesting and this step gives a further boost to the market.”
Bouwinvest and CBRE GIP, on behalf of one of its clients, will be equal investment partners while ION will take a minority interest and act as service provider. Eubelius law firm has acted as lead advisor on the launch of ION develop different Residential Platform.
* source De Tijd