There are a number of critical success factors that we believe will help us achieve our investment objectives and implement our investment strategy.
Active asset management
A key element of Bouwinvest’s active asset management approach is our continuous efforts to achieve an optimal fit with tenants’ needs through engagement with our tenants and their evolving housing desires. Thanks to our dedicated asset management, acquisition, research and marketing teams, over the past few years we have accumulated a great deal of knowledge about the liberalised rental sector, plus our target groups and their needs in terms of their lives, living environment and rental motivation. We use this knowledge in a number of ways, for instance when working with developers to verify whether their projects meet our investor needs. We also use this knowledge when assessing the sustainability, comfort level and amenities of the assets to be acquired to maximise the success of new lettings and the re-letting of properties in the standing portfolio. In addition, we have divided the tenant population of the portfolio into six specific customer segments. These segments differ significantly and are based on lifestyle, housing ambition and housing preferences.
The Fund also optimises the standing portfolio through active asset management and continuous investments to keep the homes in its portfolio up-to-date and fit-for-purpose in an evolving housing market. The Fund sees the occupancy rate as an important target and devotes a great deal of attention to the kind of homes it acquires, the services it provides and the tenant journey, from rental process to dealing with queries and complaints.
We are convinced that our active asset management, optimisation drive and marketing approach are why almost all new properties added to the portfolio are fully let before completion and why our overall average long-term financial occupancy rate is 97.5%.
One trend set to continue for the foreseeable future is that people are demanding ever-increasing levels of service. These trends and developments are now also being felt in the real estate market in general and the residential rental sector in particular. Our tenants expect more from us and our homes on a number of fronts, including quality, sustainability and affordability. And of course they also expect outstanding customer service. We have made the satisfaction of our tenants a major priority for the coming years, as an integral part of our wider ambition: to be more client-centric in our approach to all our stakeholders. What this means in effect is that we will be using the wishes of our tenants as a touchstone to improve the quality and efficiency of our processes, to optimise our contacts with tenants and to take a more proactive approach to how we provide our services.
Strategic Relationship Management
The Fund actively works to improve its reputation among a comprehensive network of vendors, real estate developers, real estate agents, the Dutch national government, local municipalities and corporations. To this end, we maintain professional relationship management to find appropriate investments, to share and gain knowledge and to exert influence. On some occasions, we partner up with lobby groups, network organisations and sector associations, such as IVBN, Holland Metropole, NEPROM, ULI, DGBC and Platform31.
For example, a good reputation among our stakeholders is essential for deal sourcing. This is essential, as investment opportunities are likely to be hampered by the growing shortage of new developments, especially in the high-demand Holland Metropole region, together with growing competition from both Dutch and foreign investors. On top of this, developers are less and less inclined to sell homes to investors. They are either selling off individual residential units at higher margins or choosing to sell to investors via tenders to maximise profits. As noted, both domestic and international investors are keen to invest in Dutch rental properties, which is pushing up prices and putting pressure on yields.
Collaboration with PropTech start-ups and and scale-ups
New technologies, such as the Internet of Things, artificial intelligence, big data and blockchain can improve the quality, productivity and efficiency of our operations. We devote a great deal of attention to new property technologies (PropTech) and start-ups and scale-ups that are developing solutions. At Bouwinvest, we foster a culture of innovation, to stay ahead of the ever-changing demands of our investors and tenants and to safeguard the value of our investments by helping to create future-proof cities. We are currently working on innovative solutions in various stages of development. We usually start with pilots, but once these have been evaluated and the outcome is positive we roll them out on a larger scale.
In addition, our Research department has developed a data integration solution to provide automatic data gathering and an advanced analytics platform. The solution includes a data warehouse, which is essentially a large collection of centrally-managed data from both internal and external sources. The solution supports decision-making at operational, tactical and strategic levels and will be expanded over the coming years to unlock more value. In addition to the data integration solution we launched, we are currently looking for a partner who can help us develop a data-gathering and analysis tool to measure the environmental impact of our portfolio in detail. This solution will help us to make our portfolio ‘Paris Proof’ in the long term.
Our ambition is to be part of the early majority by enhancing our involvement in technological development. We focus on three central innovation themes: Sustainability & circularity, Customer & user experience and How we work. Up until now, our focus has been on the launch of new products and the continued development of these products. Some have been scaled up and rolled out on a wider scale, while others have been shut down when it turned out they generated too little added value.
We currently have a portfolio of several proptech innovations. Examples include:
Pilot for the use of batteries in combination with solar panels to lower the energy use of lifts;
Pilots with mobility hubs (Hely, Pon) and parking solutions (Parkbee);
Several community-building apps;
Data integration solution to automate data gathering and conduct advanced research for better decision making;
Tenant portal, digital contracts and new ways to check the creditworthiness of residential tenants.