in beeld special no 6 august 2012 inbeeld bouwinvest special no 6 year 3 August 2012 the value of a home residential bouwinvest tenants lifestyles tenant segments target group characteristics average per target group dynamic balance suburban community long-term stability extravert dynamic balance € 4,6 878 15% 25% 19% character typical family size tenancy length rental price home type reason for renting group oriented self aware 2-4 persons 4.6 years € 878 SFD 51% limited purchasing cheerful MFD 49% budget divorce solitary sapce private quality urban short stay suburban community egocentric € 8 809 12% 9% 20% character typical family size tenancy length rental price home type reason for renting spontaneous 4 persons 8 years € 809 SFD 79% renting is the norm cheerfu MFD 21% limited purchasing budget distribution by core region introvert long-term stability € 7 878 non-core region 10% character typical family size tenancy length rental price home type reason for renting 19% critical 1-2 persons 7 years € 878 SFD 36% renting is the norm 12% 24 mid-east well balanced MFD 64% leaving capital free 11 % 9% solitary space 13% randstad 16% 32% € 18% 7,4 871 18% 23% 34% 10% character typical family size tenancy length rental price home type reason for renting 9% 16% honest 3 persons 7.4 years € 871 SFD 66% renting is the norm 10% calm MFD 34% exploring housing market 18% 22% private quality € 4,6 953 brabantstad character typical family size tenancy length rental price home type reason for renting 5% 12% dynamic balance critical 3 persons 4.6 years € 953 SFD 53% exploring housing market 16% intelligent MFD 47% cohabiting/children 11% suburban community long-term stability urban short stay solitary sapce 22% € 33% 954 private quality 4,2 urban short stay 36 character typical family size tenancy length rental price home type reason for renting inteligent 1 or 2 persons 4.2 years € 954 SFD 18% exploring housing market self aware MFD 82% possession of secondary importance The Netherlands as investment opportunity 2 6 Focus on real estate 24 There's no place like home 38 Residential real estate 3 investors seek security my house is my home in as the foundation beeld special At Bouwinvest’s request, the prominent Six families in the Amsterdam region, happy with high-quality property Like our customer relations seminar earlier in the year, the theme of this Inbeeld firm of Henderson Global Investors has traditionally a melting pot of personalities David van As, director of the central Magazine is the residential rental market. Despite all the negative news on the August 2012 written an essay on the world of real and lifestyles, talk about how they have board of the bpfBOUW feels real estate owner-occupied market, the commercial rental homes market is not performing no 6 no 6 estate seen through the critical eyes of made their rented house into their own investments contribute considerably to badly at all. After all, people are increasingly realizing the advantages of a investors. place. the pension fund achieving a good result. comfortable home in which they can enjoy living without any worries. August 2012 16 Renting is hot again 32 Know the tenant 42 View to the future You will not be surprised to learn that we believe in the liberalised rental sector. beeld special in high demand, scarce supply customer-oriented rental approach fascinating investor seminar This is reflected by the fact that we currently have several projects under con- The residential rental market stands in is efficient The theme of the annual Bouwinvest struction. Given that a more balanced relationship is forming between the rental sharp contrast to the owner-occupied A thorough knowledge of the tenant Investor Seminar included the future of and owner-occupied markets due to the mortgage interest deduction policy, the market, which is experiencing heavy means we can increase value for both the residential rental real estate market. prospects for this segment are good. In that knowledge, our aim is to make this weather. The malaise in that segment tenants and Bouwinvest. But it also The majority of those attending foresee an fact known beyond our borders. is actually pushing prospective buyers means we can find prospective tenants increase in the demand for rentals. into renting. more quickly. After all, the Netherlands is still largely unfamiliar territory internationally. In this issue, Henderson Global Investors quite rightly states that it is only a question of time before that changes. After all, the Netherlands is a Triple A country, without any social unrest and with a reasonable level of employment. The office market is in a deep dip, but also has some extremely strong segments, and the rental residential market is an interesting growth market. Some work is still required to convey that image successfully. But then foreign investors, too, will recognise the Netherlands as a good alternative with interesting returns at low risk. I hope you enjoy this issue of Inbeeld. Have a good holiday. cover image | urban short stay | jip louwe kooijmans | stuurmankade 25 inbeeld is bouwinvest's relations magazine Dick van Hal, CEO and literally translates as 'insight'. 5 inbeeld special no 6 August 2012 investment world in the Netherlands’ transparent. Characteristics of the transparent. Characteristics ‘Overseeable, structured and ‘Overseeable, special beeld in no 6 no August 2012 August 4 residential focus on real estate The case of real estate michael keogh, henderson global investors, may 2012 6 7 in It has been a turbulent period for fund managers globally, with beeld special few asset classes able to weather what was initially a financial-led August 2012 no 6 no 6 recession, before evolving into a European sovereign debt crisis August 2012 threatening the survival of the single currency. beeld special in Investor uncertainty reflects fears for the global and bond markets to heal, macroeconomic economic outlook, as unprecedented fiscal and downside risks are prominent. monetary policy makes way for aggressive austerity packages to balance government The disorder of global markets in recent years has finances. Europe is poised to re-enter recession encouraged investors to seek out investments with in 2012, and with political uncertainties, bank low volatility whilst maturing pension funds are de-leveraging and default fears lingering, it is hard also looking to secure long-term growth via lower to envisage anything other than a low grade, risk assets. European Union (EU) regulatory patchy European economic recovery. Confidence is changes for pension funds, along with new capital stronger in the US and Asia-Pacific economies, but adequacy requirements for other institutional in light of the time needed for economic structures funds, have further reinforced this trend. returns. To appreciate property’s diversification henderson global Property has developed as an increasingly held benefits, investment managers must understand a Henderson Global Investors is a leading multi-asset ‘For investors stock in a multi-asset investor’s portfolio for three range of economic, financial and real estate independent investment management company fundamental reasons: specific factors such as transparency, liquidity, managing €80.0bn in assets. We are a major in- • High income component of returns income security and the policy and legal frame- vestor in the global property market with over 30 property offers appealing • Diversification benefits works that exist at a regional and local level. years in-depth experience working on behalf of se- • Relative risk-adjusted returns gregated direct mandates, pooled funds, property The comparative performance of property vis-à-vis securities and fund of funds clients. investment features’ As figure 1 shows property looks an attractive other major asset classes is one of its principal class, distributing income in excess of that of attractions. As table 3 shows, property deserves to We have a global property presence with offices equities or bonds. In relation to core European make up a significant component of any multi- in London, Paris, Frankfurt, Luxembourg, Milan, government bonds, a wide yield spread exists asset portfolio as it has delivered strong returns Madrid, Vienna, Hamburg, Chicago, Hartford, Beij- Globalisation has had a significant impact upon because of investor concerns regarding peripheral over time compared to equities, with traditionally ing, Hong Kong and Singapore, managing €14.9bn the strategy of international capital flows and the sovereign debt, but even prior to the funding crisis far less volatility. Healthy gilt performance reflects of property assets. required return targets of multi-asset investment property generated a higher yield. It is also worth the recessionary climate since 2008, but given the management houses. This is particularly the case noting that the weakness in the equity market keenness of present bond yields, is a return Note: All figures as at 31 March 2012 for asset allocators that have an asset-liability since the outbreak of the global recession has unlikely to matched going forward. matching strategy, whereby a growing ageing increased the yield on equities, but dividends are population require pension funds to hold less discretionary whilst rental income is contractually Global Property Market Trends volatile investments. agreed. Furthermore, the varied lease structures in US: a focus on the fundamentals place internationally and the ability for rents to The U.S. appears to be decoupling from Europe and Property’s core characteristics of a tangible asset grow stands in contrast to the fixed coupon paid looks set to avoid a double-dip recession and 8 backed by relatively secure and potentially on bonds. As we slowly return to more stable resume growth in 2012, but the economic uncer- 9 growing income have become desirable by economic conditions, the historically low correla- tainty has contributed to a levelling-off in the in beeld special investors.