In the year ahead, Bouwinvest expects to increase its portfolio of assets under management to € 9 billion from the current € 8.5 billion. Around one-third of the total portfolio currently consists of assets in the international portfolio managed for bpfBOUW. We expect international investments to account for 37% of the total portfolio in 2019.
On an international level, we expect more investments in the North American and Asia-Pacific regions to give the portfolio a more balanced geographical spread. We expect global real estate investment markets to remain highly dynamic and that investment pressure will continue to lead to yield compression in the best locations, which will in turn lead to renewed interest in secondary products. At the same time, we expect our long-term return to be 5-7%, in line with our targets.
In the Netherlands, the conditions are near perfect for real estate: low interest rates, population growth, economic growth, growing employment, the recovery of consumer confidence and high real estate transaction volumes. But we also expect to face a number challenges in the Dutch market. How vibrant will Dutch city centres remain given the changes we are seeing in the retail landscape? How do we make sure the cities outside the top 10 remain attractive? What is likely to happen on the (rental) residential market? How will the elections affect the current policy for the mid-rental segment? How do we ensure a diversified supply in our major cities, and how do we make sure there are enough affordable homes?
Real estate market cycles do not run concurrently and it is possible to mitigate risks by continuing to spread investments across continents, countries, cities, sectors and investment products. We will continue to follow that strategy. Our acquisition strategy will remain focused on quality assets in stable countries, transparent markets and highly-marketable sectors.
Amsterdam, 20 March 2017
Bouwinvest Real Estate Investment Management B.V.
Dick van Hal, Chairman and Statutory Director
Arno van Geet, Managing Director Finance
Allard van Spaandonk, Managing Director Dutch Investments
Stephen Tross, Managing Director International Investments