Qualitative mismatch: right homes, right locations for specific target groups
Lifecycle-proof and high-quality apartments for starters, young professionals and seniors
Focus Holland Metropole region
Enhancing stakeholder value
At Bouwinvest, we believe that the best way to engage our stakeholders is through open and transparent dialogue and positive collaboration that cements long-term returns on investment and maximises our positive impact.
Bouwinvest does its utmost to optimise long-term alliances with all our stakeholders. We have methods and means in place to understand, meet and respond to our stakeholders needs and to engage with the issues that our stakeholders find important. In addition to this, we take an active approach to raising environmental, social and governance awareness throughout the real estate industry, partly through membership of various real estate sector organisations, such as the Association of Institutional Property Investors in the Netherlands (IVBN) and the Dutch Green Building Council. To enhance health and safety on construction sites, our objective is to have 75% of our construction sites registered under the Dutch Considerate Constructors Scheme (‘Bewuste Bouwer’) in 2021. We are also planning start adding green clauses to our rental contracts, with the ultimate goal of collaborating with tenants to improve the environmental performance of our assets.
As always, one of the Fund's main aims is to offer the right homes for specific target groups in the right locations to meet the needs of one of our main stakeholders, our tenants. This will also enable us to record stable returns for our investors. This is why we want to be involved in developments at an early stage, to make sure our homes meet local demands and our ambitions. Our target is to achieve a score higher than 7.5 in client satisfaction surveys and a score higher than 7.0 in our tenant satisfaction surveys.
Core region strategy
The Fund has a clear core region strategy. We invest in Dutch rental properties located in areas with the strongest social, demographic, economic and real estate market prospects. These core regions include the cities (and peripheral municipalities) of the Randstad central urban belt, urban conurbations in Brabant (with a particular focus on ‘brainport’ Eindhoven) and the larger cities in the eastern part of the Netherlands. These local housing markets offer the best medium to long-term investment foundation for the mid-market housing and liberalised rental sectors. Approximately 99% of the Fund's investments are currently in these defined core regions.
The Bouwinvest Research & Strategic Advisory department (R&SA) periodically determines the core regions for the Residential Fund, and the most recent update took place in 2019. These updates are based on objective data and are conducted in close cooperation with the Fund's management. The Fund uses the core region model for both tactical and strategic purposes. On a tactical level, the model forms a guideline for acquisitions and divestments. This model is also an important input parameter in the risk-return form: the higher a municipality scores as a core region, the lower the risk and investment hurdle. The core region model also supports strategic decision making, and gives the Fund a clear focus.
Holland Metropole region
Due to the structural lag in the supply of new-build properties, combined with the persistent high demand for homes in both the private and institutional markets, the pressure on the housing market is actually increasing and spreading to peripheral municipalities close to the larger cities. The Fund has now increased its focus on the Holland Metropole region - the urban regions of Amsterdam, The Hague, Rotterdam, Utrecht and Eindhoven - and to a somewhat lesser extent the cities of Zwolle, Arnhem and Nijmegen. At the same time, any assets in these regions need to be close to excellent infrastructure and located within vibrant areas that meet the needs of current and future tenants. This is especially true for increasingly popular (suburban) locations serving the larger cities.
Lifecycle-proof and high-quality apartments
In addition to the much-discussed quantitative mismatch (supply lagging demand), the Netherlands is faced with a growing qualitative mismatch. For one, a new generation of young people (starters and young professionals) is entering the housing market and the vast majority have little choice but to enter the rental market. The majority of these young people are looking for (smaller) apartments in the big cities. At the same time, the 65+ target group is also changing quite radically and becoming increasingly diverse in terms of their housing needs and requirements. Bouwinvest closely monitors the trends among the above-mentioned target groups to gain a better understanding of their very different housing needs. This gives us the insight we need to respond even more effectively to the needs of these target groups and in turn realise even more future-proof homes for a wide range of potential tenants. This is why we are focusing on lifecycle-proof and high-quality apartments for starters, young professionals and seniors (one-person and two-person households).