Bouwinvest, the largest investor in residential properties in the Netherlands on an unleveraged basis, has acquired 300 high-end rental apartments in The Pontsteiger, a landmark tower to be developed alongside Amsterdam’s IJ waterway in a new neighborhood for the city. The investment is for Bouwinvest’s €2.6 billion institutional Residential Fund.
Allard van Spaandonk, Director Netherlands Bouwinvest said: “We are seeing clear signals that the Dutch residential market is bottoming out after five years of successive price falls. Combined with new government legislation to rebalance the domestic housing sector and make it more open to market forces, we expect both solid capital gains and rental increases in the Netherlands in coming years. This means the Pontsteiger acquisition fits squarely into the investment strategy of our Residential Fund, which aims to capitalize on the deep structural changes underway in Dutch residential.”
Shaped like an arch, the 26-storey tall Pontsteiger will serve as the eye-catching centerpiece of Houthaven, a new residential neighborhood to be developed on former dockland just west of Amsterdam city center. The building will be almost fully residential in nature, with a total of 450 apartments, of which 150 will be for individual sale, and a large parking garage for residents. Construction is expected to start in June 2015 and to be completed by November 2017.
Plans for The Pontsteiger were first drawn up in 2007, however the financial crisis, which hit the Dutch real estate market particularly badly, meant that they were shelved until earlier this year. In March 2014 developers Dura Vermeer and M.J. de Nijs took over the project.
Dutch house prices have declined by more than 18% since a peak in 2008, while rents have risen, returning the house-to-rent ratio to its long-term fair value level. New legislation this year substantially opened up the country’s highly regulated rental market to market pricing and will force social housing providers to sell part of their housing stock and focus on low-income tenants. The tax deductibility of mortgage interest payments is also being tightened, helping to reduce the attractiveness of buying rather than renting.
Allard van Spaandonk concluded: “Now is a good time for investors to step into Dutch real estate, particularly residential properties. After five lean years the market has hit an attractive level in the cycle. With the government’s moves to rebalance the housing sector as a whole we’ve reached an historical inflection point that makes for a compelling investment proposition.”