Syntrus Achmea Real Estate & Finance is an investment manager specialising in real estate and mortgage investments for institutional investors.
With €23.3bn assets under management, we are the most active real estate and mortgage investment manager in the Netherlands, offering services in real estate sectors such as residential, healthcare, retail, office and residential mortgages. We offer services to >60 institutional clients (predominantly pension funds) through separate accounts, commingled vehicles and funds of funds. The focus of Syntrus Achmea is to achieve stable income returns and long-term capital appreciation by value-enhancement strategies through active asset management. Syntrus Achmea and our legal predecessors have been active on the Dutch real estate and mortgage market for more than 60 years and have a well-established and proven track record.
The direct investments comprise predominantly residential, retail, office and healthcare properties in the Netherlands. The indirect investments are managed through separate accounts (multimanager activities) and pooled vehicles.
The pooled vehicles have different investment strategies (ranging from core to opportunistic) and geographical allocations (Europe, North America and Asia Pacific). Over €1bn of capital is invested in 40 non-listed property vehicles in fund of funds structures worldwide since 2004.
Syntrus Achmea is part of Achmea, the holding company of a group of strong, successful brands in financial (insurance) services. Within the organisational structure Syntrus Achmea has its own profit and loss account.
Investment principles & strategy
Our investment approach is based on our clients’ goals and investment beliefs and recorded in a portfolio plan, developed in consultation with the institutional investor and revised on a yearly basis. And is aligned with our pledge to our stakeholders that we will pursue a strategy of Meaningful Investing. Syntrus Achmea wants to contribute to a sustainable future for all our stakeholders: our clients and shareholders of course, but also in a broader sense society, the environment and real estate users. We aim to make this contribution by ensuring that the real estate and mortgage investments we make on behalf of our clients not only generate stable financial yields, but also have a beneficial social impact.
We understand that real estate and mortgages can play a facilitating role in the cities where we already operate or wish to operate in future. By cooperating with the right partners, we can for instance ensure that our investments have an impact on the local and wider economy, on action to tackle climate change, on the development of social structures in communities and even on the effective functioning of all or part of a city. This is how we put Meaningful Investing into practice.
OFFICE: The prime office locations in the G4 cities still experience a high demand from users and investors. Rents are high and yields are low. The average vacancy rate in the Dutch office market is below 10% and the lowest in the post-financial crisis era. Brexit is putting pressure on the Amsterdam market and the ‘war for talent’ demands attractive locations to work. Non-solitary (mixed-use) office locations, in particular with a good access to public transport are increasingly wanted. Total returns are expected to remain high in the coming years for the best office locations.
An economic slowdown could be expected if geopolitical uncertainties continue to persist and this could affect the outlook for office investments. The supply for investors is limited so investment volumes are expected to be relatively low.
RESIDENTIAL: In the last four years, investors in the Dutch residential rental market perceived double-digit returns and our forecast shows another solid outlook for residential investments. The surge in house prices has been fuelled by a long-term forecasted housing shortage and historically low interest rates. Especially larger cities become less affordable as a consequence since income growth cannot keep up the pace of increased housing prices. Investment opportunities become scarce in the current market. As a result, investors may either move up the risk curve or settle for opportunities which are aimed to enhance housing affordability. The latter of the two focuses on low to medium rent level investments in (larger) cities. These investments are characterised by a vast structural demand which results in steady cash flows and an attractive risk return ratio.
RETAIL: Prime high street locations in large cities that benefit from the urbanisation trend and have a high footfall are still in favour of institutional investors. Secondary high street locations in smaller cities and shopping centres without a dominant position in the catchment area are affected by a decreased demand for physical retail space and show increasing vacancy levels. Convenience centres with focus on food retail and social cohesion in the neighbourhood are set for a brighter future in the retail landscape. The increased demand for workplaces, retail, services and leisure in urban areas with high walkability and transit profiles stimulates the demand for mixed-use developments.
OTHER: The Dutch economy will continue to grow in 2019, but at a slower pace than previous years. Due to declined consumer confidence the economy seems to have passed its peak, but remains robust. Geo-political developments imposes uncertainties on the global economy and could also threaten the Dutch economy. As a result of the persistently low interest rates, real estate remains an attractive alternative for investors. The market is still very liquid. The most important inhibiting factors, however, are the reduced opportunities for external financing and a lack of product. The scarcity of supply is mainly caused by a shortage of high-quality construction sites. Partly as a result of this, the focus of investors shifts to secondary locations.
Strategic corporate development
Looking back on the recent period, we can conclude that investments in real estate and mortgages have on average generated good to extremely good yields. Syntrus Achmea Real Estate & Finance received €2.5bn in new mandates in 2018 last year from institutional investors: €1.4bn in mortgages and €1.1bn in real estate. This is expected to increase the assets under management this year to more than €23bn.
We’re very proud of the confidence our clients have shown in us through these mandates. High-quality real estate is scarce and expensive, but thanks to our purchasing power and our extensive network, we are succeeding in acquiring investments that can generate long-term financial and social returns for our clients. Interest in mortgages among our institutional clients remains unabatedly high says Syntrus Achmea CEO Arthur van der Wal. We are also witnessing growing interest in this product from foreign investors. Given the options we can offer them, we expect our mortgage profile to continue to grow in this respect.
Performance is measured against relevant benchmark(s), ie, MSCI which are the accepted standard(s) in each of the regions where Syntrus Achmea operates and whereby, we also adhere to our five Sustainable Development Goals (SDGs). We are convinced that our ESG management can contribute to a healthy and sustainable communities for current and future generations.
Syntrus Achmea B.V. (“Syntrus Achmea”), having its registered office in Amsterdam (Chamber of Commerce no. 33306313), is authorised by the Netherlands Authority for the Financial Markets as intended in article 2:65 sub a of the Dutch Financial Supervision Act (Wet op het financieel toezicht, hereinafter referred to as: “Wft”). This authorisation allows the authorised manager to manage as intended in article 1:1 Wft and authorised to manage individual assets and to advice regarding financial instruments in the exercise of profession or business. The information in this document is intended for professional investors. The information in this document is intended for orientation purposes only and does not constitute a proposal or an offer, nor is it intended to serve as the basis for any investment decision. This information therefore does not offer any party the opportunity to subscribe for a fund or to acquire or obtain financial instruments, personal investment advice or other financial services in any other way. No guarantees or statements are given concerning the accuracy and completeness of the information. No rights can be derived of the information, recommendations and calculated values provided. The information contained in this document is indicative only and may be subject to change may be changed without further notification. The value of investments may fluctuate. Results achieved in the past offer no guarantee for the future. All information in this document is owned by or licensed to Syntrus Achmea and is protected by intellectual property rights. It is not permitted to copy, reproduce or distribute the contents of this document or parts thereof in any manner whatsoever without the express.