ASR Real Estate B.V. invests in real estate and infrastructure (real assets) for own account and for institutional investors, and manages real assets portfolios. a.s.r. has been investing in real assets for over 130 years.
As a consequence of the Aegon transaction, the Real estate portfolio now includes Aegon NL’s real estate portfolio and its 50% interest in the joint venture Amvest. The other 50% of Amvest is owned by PfZW, the Dutch pension fund for the care and welfare sector. As a result, the real estate portfolio of a.s.r. expanded in additional residential, health and development assets.
The Real estate portfolio at year end totalled € 11.6 billion (2022: € 7.8 billion), divided into € 5.1 billion (2022: € 5.4 billion) on behalf of a.s.r., € 4.0 billion on behalf of a.s.r. acquired from Aegon and € 2.6 billion (2022: € 2.4 billion) on behalf of institutional investors. The total inflow of new capital from institutional investors amounted to € 0.3 billion (2022: € 0.3 billion). The asset advice by a.s.r. real assets investment partners totalled € 5.5 billion (2022: € 6.2 billion), all on behalf of institutional investors.
Market
The Dutch economy has experienced a cooling-off, instigated by higher interest rates and elevated inflation. Nonetheless, unemployment remained low and wage growth through relatively strong collective labour agreements saved part of customers’ purchasing power. Investment volumes remained low as buyers and sellers had yet to find a new price balance, causing downward pressure on returns. In the meantime, the occupier market was continuously supported by high employment rates and delayed new build real estate supply, which boosted occupancy rates and returns. Hybrid working and omnichannel shopping are polarising and transforming markets rather than damaging them. Rent regulation on the residential market could moderate returns, but fundamentals remain strong.
Products
ASR Real Estate B.V. manages non-listed sector funds, which invest in retail and residential properties, offices, real estate on science parks and agricultural land in the Netherlands. These real estate funds are open to institutional investors seeking stable capital growth. a.s.r. also invests in renewable energy sources such as wind farms, solar parks and estates.
a.s.r. real assets investment partners develops investment strategies, ensures their implementation and gives institutional investors control over real asset portfolios through active monitoring, reporting and engagement.
Strategy and achievements
a.s.r.'s objective in real estate is to create long-term value for investors. To this end, agreements have been made to generate returns at acceptable risk levels. In the longer term, it is important that a.s.r. makes a substantial contribution to the (economic) objectives of tenants and leaseholders. a.s.r. also has a strong focus on quality, believing that quality retains its value. It therefore invests continuously in maintenance, good quality materials, the sustainability of buildings and sustainable land use.
In 2023, a.s.r. and DSM announced that they will team up to further develop the Biotech Campus Delft as a world leader in bioscience. They will engage in a long-term collaboration where ASR Dutch Science Park Fund invests up to € 500 million in real estate at the location over a period of 20 years. With this long-term investment, a.s.r. contributes to stimulation of the Dutch knowledge sector.
In October 2023, a.s.r. received the extension permit for ASR Real Estate B.V. as a fund manager with regard to the type of infrastructure and the approval of the AFM for the ASR Dutch Green Energy Fund I. a.s.r. intends to place investments in solar and wind farms in this fund, that has yet to be structured.
As a real estate investor, a.s.r. recognises its substantial responsibility for contributing towards liveable and sustainable buildings, towns, cities and communities. By investing in appropriate and sustainable real estate, a.s.r. aims for a positive impact on the built-up environment, for present and future generations. In 2023, ASR Real Estate B.V. sharpened its ESG vision and designated four strategic themes:
Reduce energy intensity and GHG emissions;
Adapt to climate change and related risks;
Regenerate biodiversity and ecosystems;
Improve well-being and social equality.
The strategic themes are translated annually into strategic objectives in the business plans of the Funds. More information can be found on the website of ASR Real Estate B.V.
Outlook for 2024
Inflation is trending downward but is expected to remain elevated in 2024. This will create more room for economic growth, while the labour market will remain tight, with only a slight rise in unemployment. With the majority of interest rate hikes behind us, real estate market dynamics are expected to pick up gradually in 2024, finding a new price balance. Full equity investors and transformation-driven investors could profit from current devaluations. On the other hand, occupier markets are expected to remain solid as unemployment will remain low and customer spending will recover. Hybrid working is likely to further polarise the office market, with highly accessible and multifunctional office locations and sustainable assets being the most resilient. Retail real estate’s pricing and fundamentals are improving and science park assets will continue to facilitate the advanced knowledge-based economy. Enduring pressure on land and housing will support the rural and residential markets, although sustainable rural transformation and residential regulation remain uncertain aspects of both investment markets.