a.s.r. real estate invests in real assets (real estate, infrastructure, forestry and agricultural land) for institutional investors. a.s.r. has been investing in real assets for over 130 years.
As a real estate investor, a.s.r. recognises its responsibility in contributing towards liveable and sustainable buildings, towns, cities and communities. a.s.r. strives to contribute to a sustainable and climate-adaptive living environment for all – now and for future generations.
The real estate portfolio at year end totalled € 12.4 billion (2023: € 11.6 billion), divided into € 9.4 billion (2023: € 9.1 billion) on behalf of a.s.r., and € 3.0 billion (2023: € 2.6 billion) on behalf of institutional investors. The total inflow of new capital from institutional investors amounted to € 0.3 billion (2023: € 0.3 billion). The asset advice by a.s.r. real assets investment partners totalled € 5.5 billion (2023: € 5.5 billion), all on behalf of institutional investors.
Market
The Dutch economy recovered in 2024, driven by slightly lower inflation, real wage growth and lower policy interest rates. The labour market continued to be tight. Furthermore, investment volumes grew on a year-on-year basis. Equity-driven and private investors were particularly active while most institutional investors continued to wait. Occupier markets were continuously supported by high employment rates and delayed new build real estate supply. Ongoing trends (for example, hybrid working and omnichannel shopping) intensify real estate market polarisation. This means prime assets retain demand and value, while secondary locations face declining interest and value. Regulatory certainty under the Affordable Rent Act and certainty about (historical) rent indexation under European consumer protection laws have eased investor caution, opening up room for residential returns to recover alongside rising owner-occupier prices. Despite regulatory uncertainty, farmland returns remained solid due to the ongoing shortage.
Dilemma - Should a.s.r. continue investing in residential rental properties or not? Balancing between return on investment and affordable rent.
The Netherlands faces an immense challenge in the housing market, requiring significant investments in sustainability and necessary infrastructure. By 2034, no less than one million new homes need to be built in the purchase and rental segments combined. This will require approximately € 400 billion in investments. It is therefore important to encourage the involved parties to expand the housing stock.
Since the Affordable Rent Act came into effect on July 1 2024, landlords can no longer set the rent for residential properties in the mid-segment themselves. They are bound by government regulations that cap rental prices. This seems like good news for tenants, but the question is whether landlords can recover their operating costs and achieve their intended return on investment with lower rental income from these properties. There is a risk that landlords will choose to sell these rental properties because the investment is not sufficiently profitable. This is already happening as well. As a result, the number of properties for sale increases, and there are fewer and fewer rental properties. Unfortunately, buying a property is not an option for many tenants because they cannot get a mortgage. This group of house hunters then slips through the net.
For developers and builders, the capping of rental prices for mid-segment rental properties has made it much more difficult to make new housing projects profitable. The revenues from these projects are now (largely) capped, and the construction costs to realise these homes are increasing. As a result, fewer rental properties will be delivered in the coming years, and at a slower pace. This will not solve the shortages in the housing market.
Through its investments, a.s.r. fulfils two important social roles regarding the residential property market: on the one hand, it is important that there are sufficient and affordable rental properties available. On the other hand, investments in housing must be profitable in relation to the obligations that a.s.r. has towards its clients. Naturally, a.s.r. will continue to invest in its existing residential property portfolio and in new rental properties. However, due to the Affordable Rent Act, this will proceed at a much slower pace in the coming years than a.s.r. would like.
Products
a.s.r. real estate manages non-listed sector funds, which invest in retail and residential properties, offices, real estate on science parks, agricultural land and renewable energy in the Netherlands. These funds are open to institutional investors. a.s.r. is anchor investor in these funds.
a.s.r. real assets investment partners is part of a.s.r. real estate but operates independently. For institutional clients, including a.s.r., it develops investment strategies, implement these through manager selection processes and ensure the monitoring, reporting and engagement of globally diversified real assets investments.
Strategy and achievements
On behalf of institutional investors, a.s.r. real estate invests responsibly in high-quality real assets that fit within a clearly defined strategy. This provides the optimal balance between long-term return on investment and value creation, benefiting not only a.s.r.’s clients but also society as a whole. See section 3.1.2 for more information about the real estate ESG vision and four strategic themes.
On 1 July 2024, the ASR Dutch Green Energy Fund I was launched to contribute to the energy transition. Currently, the fund has a size of approximately € 400 million with the ambition to grow to € 800 million and invests mainly in solar and onshore wind farms in the Netherlands.
This year, a.s.r. celebrated the 125th anniversary of the De Utrecht estate in the province of Noord-Brabant in the Netherlands. This estate, covering approximately 2,500 hectares, has been owned by a.s.r. since 1899 and is open to the public. In addition to nature, recreation, forestry and agriculture, the estate also provides space for housing, mobility and energy.
In October, the new mixed-use construction project Wonderwoods was delivered to the ASR Dutch Mobility Office Fund and the ASR Dutch Core Residential Fund. The project, consisting of two towers with 300 trees and 75,000 plants and shrubs, is a green eye-catcher in a central location in Utrecht in the Netherlands. Wonderwoods provides space for living, working and relaxation.
Furthermore a.s.r. real assets investment partners has been appointed as real estate oversight manager for the Dutch Pension fund for Housing corporations (SPW). On behalf of SPW, it will convert the existing real estate portfolio into a predominantly European unlisted portfolio, and ultimately actively manage it. SPW’s new portfolio will have a size of at least € 1 billion with a firm focus on Dutch residential properties, while also allowing for globally listed real estate shares.
More information can be found on the a.s.r. real estate website and the a.s.r. real assets investment partners website.
Outlook for 2025
The Dutch economy is expected to gradually normalise in 2025 with lower inflation, showing slight economic growth and continuing low unemployment levels. Also, the European Central Bank (ECB) is expected to gradually further cut their policy interest rates which will lessen the impact of interest rates on real estate yields. This helps to increase the attractiveness of real estate investments and the occupier market activity. Due to continued polarisation, the demand will stay focused on primary retail city centres and streets, dominant district shopping centres and inner city high-quality office assets in the five largest Dutch cities. Ongoing shortage of both rental dwellings and farmland will support residential and farmland returns. As a result of increased science park vacancy rates in especially outdated office buildings, more opportunities arise for high-quality and modern research and development (R&D) buildings on the more attractive science parks.