Two pension funds have backed a project to renovate one of the oldest parts of Amsterdam—an area renowned for prostitution and its drugs trade.
“Dutch pension funds have a duty towards their members to maximize their risk-adjusted investment returns in a socially responsible way.”Landbouw, the pension for agricultural workers, and the Rabobank pension have taken a combined 35% stake—worth €60 million ($67 million)—in a fund investing in the ‘Wallen,’ a notorious area of the Netherlands’ capital which includes its Red Light District, according to the pensions’ advisor.
However, the pensions aren’t ramping up their exposure in sex, drugs, and rock ’n’ roll: The fund instead backs Project 1012, aimed at renovating and revitalizing the Wallen.
Property manager Syntrus Achmea Real Estate & Finance, which advised on the investment, said it would help “transform the area into an attractive residential neighborhood as well as a vibrant hub for creative businesses and retailers.”
The portfolio consists of 133 buildings but “could expand considerably,” the advisor said.
“Dutch pension funds have a duty towards their members to maximize their risk-adjusted investment returns in a socially responsible way,” said Henk Jagersma, the property manager’s CEO. “We believe that by applying impact investing principles in Amsterdam’s city center we can achieve a solid uplift in property values for a low level of risk. At the same time, we can deliver a much safer and more attractive neighborhood for residents and visitors alike.”
The investment backs Project 1012, first proposed in 2007, which aims to address problems with sex trafficking, forced prostitution, and money laundering. A brochure from Amsterdam’s government details plans for new bars, restaurants, and hotels—and the closure of roughly 200 “windows” in the area’s designated legal “prostitution zone.”
(Amsterdam’s famous Condomerie boutique is likely to stay, however. And yes, it’s exactly what you think it is.)
Outside of the Project 1012 investment, the two pension funds have also been granted “preferential negotiating rights” regarding four residential developments elsewhere in the city.
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