Achmea Real Estate has received two mandates totaling EUR 117 million from a Dutch insurer for the Achmea Dutch Retail Property Fund (ADRPF). The insurer is already a participant in the Retail Fund
The mandates mark the successful transformation of the retail fund in recent years. This involved moving away from retail properties in smaller cities and developing a new strategy focused on dominant neighborhood shopping centers and retail properties in the nine strongest city centers in the Netherlands. Moreover, with the acquisition of two retail portfolios last year, the fund grew to a size of almost EUR 1 billion.
Retail market is picking up
"We see the retail market in the best Dutch inner cities picking up despite the economic uncertainties," says fund manager Peter Koppers. "Vacancy rates in inner cities are falling due to increased demand from new entrants and expanding retail chains. In addition, we are seeing many transformations to other functions.”
Protection against inflation
In the Dutch retail sector, leases are often indexed with inflation. Koppers: "With that, they can follow inflation much better than other real estate sectors. Now that market rents are stable, or even growing, the retail sector is expected to offer investors protection against rising inflation. Retail real estate currently has high cash flow returns compared to other real estate sectors, while the risks in the Netherlands are greatly reduced. Strong declines in value due to rising interest rates are less likely than other segments due to higher initial yields."
Important role in approaching consumers
Koppers thus sees a revival of retail real estate. "Stores play an important role in approaching consumers. While consumers have started to store more online, they are visiting shopping areas in a more targeted way. They engage in webrooming. This involves consumers searching online for an item before buying it in the store. The store today has multiple functions. Not only the transaction is important, but also precisely conveying the brand or concept to the consumer."
Fund grows to nearly one billion
The Achmea Dutch Retail Property Fund is growing in size, thanks in part to these new mandates from a Dutch insurer. The fund now has a size of almost EUR 1 billion, spread over ninety properties. The fund aims for long-term outperformance against the MSCI retail benchmark. In the Global Real Estate Sustainability Benchmark, the fund achieved the maximum rating of five stars.