Dutch pension fund Pensioenfonds Metaal en Techniek (PMT) gave its fiduciary manager MN permission to commit €150m to cornerstone the launch of the Aberdeen Standard Pan European Residential Property Fund, the first open-ended core property fund of its kind that will focus exclusively on residential property in Western Europe. The strategy of the to be launched Aberdeen Standard Pan European Residential Property Fund is based on the global trend of urbanisation. The fund will focus exclusively on Western Europe, including Scandinavia. The target size of the fund is over €1.5 bn.
Aberdeen Standard Investments, MN and PMT jointly developed a fund strategy for investing in European residential assets that stand to benefit from the strong supply-demand fundamentals in Europe’s leading cities driven by demographic trends and urbanisation. The fund anticipates a high occupancy rate, will utilise low levels of leverage and have a strong focus on sustainability issues.
“The popularity and resulting urbanisation of many European cities have led to a huge shortage of appropriate housing. As such, there is a strong and growing demand for good, high-quality rental accommodation in locations with the right facilities. For instance, student towns and cities may need a different type of accommodation than locations where well-paid professionals or families live. Our fund will cater to those differences,” says Marc Pamin, fund manager at Aberdeen Standard Investments.
Various European institutional investors are currently carrying out due diligence on this concept fund. Marc Pamin says that Aberdeen Standard Investments is delighted with PMT as a cornerstone investor. PMT is currently one of the biggest and most active European property investors.
Jeroen Reijnoudt, senior portfolio manager at MN, PMT’s fiduciary manager, says: “The European universe of core property funds is still in its infancy. The index of pan-European core property funds (PEPFI) is only one-tenth the size of the U.S. index (ODCE), even though in terms of population Europe and North America are not very different. PEPFI includes hardly any residential properties, while about a quarter of the comparable U.S. index is comprised of this segment. In Europe, it is possible to build funds that fully meet contemporary requirements, contribute to our target yield and suit our vision of sustainability and governance. PMT’s new portfolio is fully in line with the Global Real Estate Sustainability Benchmark and fully compliant with the European Association for Investors in Non-Listed Real Estate Vehicles standards. Aberdeen Standard Investments was chosen because the organisation has a number of unique qualities, in particular, its strong local representation in several countries in Western Europe and the shared views on how to invest in residential property.”
Hartwig Liersch, Chief Investment Officer of PMT, adds that PMT’s large-scale European property investment programme (€2.5bn) is well on track. MN increasingly acts on PMT’s behalf as a co-developer of core property products. As a result, PMT gets a good understanding of the non-listed property funds in its mandate, which also creates non-listed property products that are also interesting to other institutional investors. PMT and MN want to be pioneers in the market in terms of sustainability. Liersch also says that this is a fine example of the synergy between the interests of PMT on the one hand and the opportunities on the other hand that such a large property investor as Aberdeen Standard Investments offers. Moreover, Liersch sees housing as a nice addition to PMT’s European portfolio. The low correlation with commercial property, the relatively stable demand and the associated revenue stream, make residential property an attractive asset class.
