APG Partners Pramerica in Real Estate Loans
(April 2, 2014) — APG and Pramerica have launched a €265 million real estate debt fund, designed to build up diverse junior debt secured against commercial real estate assets in the Netherlands.
The fund, for which APG provided the majority of the capital, will be known as the PRECap V Netherlands fund.
Andrew Radkiewicz, managing director and co-head of Europe at PREI—the real estate investment and advisory business of Prudential Financial—said: “The Netherlands is at an attractive point in the cycle, earlier in the recovery phase than the UK, and there is less competition in the lending market compared to other countries, where increasing numbers of lenders are active.
“There is an exciting opportunity in the Netherlands market, with a large number of loans and commercial mortgage backed securities expiring in the short to medium term, and a significant shortfall in existing debt availability. Any deals we do will be predicated on the quality of the underlying asset secured on the loan, but we believe that there is potential to generate excellent risk adjusted returns on behalf of our investor.”
Robert-Jan Foortse, head of European property investments at APG Asset Management, added: “The Dutch real estate market suffers from a funding gap, where the finance market remains tight and dislocated. At this moment, there is the opportunity in the Netherlands to provide junior debt and to capitalise on both acquisition as well as refinancing opportunities. Within APG Real Estate, we view this as the right moment to allocate capital to the Dutch real estate market through this exclusive debt mandate with PREI.”
This deal marks the 30th debt investment arrangement from Pramerica Real Estate Capital so far. The value of capital invested through Pramerica’s funds now exceeds €1.2 billion, secured against €4.6 billion of European real estate.
The Dutch real estate market appears to be hotting up, with managers in the Netherlands now targeting investors from outside the country.
Last week, aiCIO reported that there is approximately €1 billion worth of deals in the pipeline, with real estate yields currently producing 1.5% plus a cash dividend of more than 4%.
“Amsterdam is a great location, but the local GDP structure in The Hague is also interesting,” said Jaap van der Bijl, managing director of investor relations at Syntrus Achmea Real Estate & Finance.
“We also include the wider metropolitan area, for instance Amstelveen and Haarlem. Every town has its specialised profile, which requires local in-depth knowledge to select the most promising real estate in that local market.”
And in August 2013, aiCIO reported that Dutch investors were swarming back into the asset-backed securities market, piling into Dutch mortgage loans in particular.
PME currently invests €2.7 billion in Dutch residential mortgages, and plans to expand that to €3 billion in the next year, while ABP also has €6.5 billion in domestic mortgage securities.
Related Content: Dutch Pension Funds Swarm into Mortgages and Dutch Real Estate Managers Target Overseas Investors