ABP and Greystar invest €420m in new rental homes

Addressing the rental home shortage, ABP and Greystar have joined forces by launching the Dutch Essential Housing Venture.

Stichting Pensioenfonds ABP, the pension fund for people working in government and education in the Netherlands, through its asset manager APG Asset Management N.V. (APG), has announced that it has partnered with global investment, development, and real estate management firm Greystar to launch a new development-led strategy known as the Dutch Essential Housing Venture, with a first tranche commitment of €420m.

Through the Dutch Essential Housing Venture, ABP and Greystar aim to deliver high quality homes for mid-income earners, key workers and pensioners impacted by the lack of rental housing in the Netherlands.

“APG and Greystar have established many successful partnerships around the world over the past 15 years. We are very pleased that our first venture together in Europe is in our home market, the Netherlands, with a focus on developing new affordable residential units while targeting key workers as tenants.

“Our largest client ABP has identified this specific segment of their portfolio as a key area in which their investments can make a positive contribution on the lives of the participants in the pension fund.”

Robert-Jan Foortse, Head of Real Estate Europe, APG

The first tranche of the partnership aims to build and operate a portfolio of c. 1,500 new homes in the Randstad area and other cities across the Netherlands, primarily via strategic developments that meet a strict set of investment criteria.

The developments will meet specific housing specifications, including efficiently designed units, environmental sustainability (minimum A+++ energy labels and BREEAM Excellent certification), and affordable rents (max €1,200 per month/price level 2024) all within proximity to public transport hubs. Residents will also benefit from on-site amenities and management.

“ABP wants to work together to build a good pension in a livable world. To achieve this, we look for attractive long-term investments, preferably ones that make a difference in the lives of our participants. That is why we aim to invest €10bn with impact in the Netherlands by 2030, of which approximately €5bn in residential properties. The Netherlands has a housing shortage, and our participants experience this too.

“With this initiative, which will initially cost €400m, we will add approximately 1,300 to 1,500 affordable homes, including in the city of Leiden. Homes that our participants who work for the police, in education and for the government can live in. This investment pays out twice to our participants.”

Harmen van Wijnen, Chairman, ABP

The Dutch Essential Housing Venture has already begun, with the acquisition of a development opportunity in Leiden. Developed by Ten Brinke Lubro Ontwikkeling BV, the scheme will operate under a new brand and comprise 780 one-, two- and three-bedroom apartments with amenity space.

Construction will start in 2024 on the first phase, with delivery scheduled for 2027 by Ten Brinke Bouw BV.

“The Essential Housing Venture will invest Dutch institutional capital back into major employment hubs in the Netherlands to solve a real issue in the domestic housing market. Mid-income earners are struggling to access high quality and sustainable rental housing, as they are increasingly priced out of the competitive rental market yet are unable to access social housing. Real impact is only achieved if the right product is delivered at scale.”

Mark Kuijpers, Senior Managing Director – Central Europe, Greystar

Leiden has a growing population but a shortage of housing, increasing the need for affordable rental accommodation. It is home to Leiden University and the rapidly expanding Bio Science Campus, making it desirable location. In addition, Leiden is within a ten-minute train ride of The Hague Central Station and 40 minutes from Amsterdam Central Station.

“Through our partnership with ABP and APG, we’re moving forward with an exciting opportunity to bring much needed housing to mid-income earners in the Netherlands. As a company, we are incredibly passionate about and highly focused on providing new high-quality housing supply at attainable price points to cities around the world, and we look forward to bringing that experience to the Netherlands in partnership with ABP and APG.”

Wes Fuller, Chief Investment Officer, Greystar