On the pulse of the property world The real size of the Dutch
real estate investment market An estimate of the total
professionally managed real estate market Bert Teuben Rob Courtens
Eindhoven, June 16 2011
Slide 2
IPD 2011ipd.com 2 Agenda Introduction Literature review Real
estate market size estimate Top down Bottum-up Theoretical
estimates Based on transactions Debt and equity Market
structure
Slide 3
IPD 2011ipd.com 3 Introduction Importance of estimate market
size for total sector: More information on the different type of
investors and their influence on the real estate market and the
economy; For foreign investor the market size gives more
information on the (potential) liquidity and attractiveness of a
country; More transparency on equity and debt in the market is
essential. Additional IPD goals: Market coverage for IPD indexes;
Weighting of countries in pan-European and global indexes;
Indentifying missing investors in IPD- indices.
Slide 4
IPD 2011ipd.com 4 Top down approach from different sources,
mainly government data (Callender e.a., 1996) Based on a relation
to the GDP in a country (Ling, e.a. 1999) Difference between
investible and invested Previous literature
Slide 5
IPD 2011ipd.com 5 Theoretical framework Real estate market
Listed End investor Non-ListedDirect Corio, Wereldhave, Unibail,
Vastned, Nieuwe steen etc. Eurindustrial, ING funds, Achmea funds,
Altera, Q-park, Bouwfonds, Ping properties, Bouwinvest
Institutional: Spoorweg, MN services Private: Kroonenberg, Mayfield
Banks Fund of funds RE Derivatives Capital market RE market Assets
RE DebtRE Equity
Slide 6
IPD 2011ipd.com 6 Agenda Introduction Literature review Real
estate market size estimate Top down Bottum-up Theoretical
estimates Based on transactions Debt and equity Market
structure
Slide 7
IPD 2011ipd.com 7 Top down Total stock 2.081 billion
Residential 1.653 billion Non-residential 428 billion Statistics
Netherlands (CBS) not market value, but includes social housing and
owner occupied; invested = 110 billion (market value) includes
owner occupied, agricultural land and buildings, government assets,
factories
Slide 8
IPD 2011ipd.com 8 Bottom up Dutch and non-domestic investors:
60 pension funds and insurance companies with direct investments 32
listed funds 348 non-listed funds 89 private investors with
portfolios of over 100 million Total 118 billion, but not
completely sure on covering all real estate owners
Slide 9
IPD 2011ipd.com 9 Theoretical estimate Investible 45% of GDP
(Hordijk) 45% of 592 billion is 266 billion Invested 36% of
investible 36% of 266 billion is 96 billion
Slide 10
IPD 2011ipd.com 10 Based on transactions Only for commercial
real estate (offices, retail and industrial) transaction are
recorded over long time-periods (average annual figure 5.8
billion); Average holding period of sold assets during the period
1995-2010 was 15 years for commercial real estate (source IPD/ROZ
real estate index) 15 x 5.8 billion = 87 billion Source: Jones Lang
LaSalle
Slide 11
IPD 2011ipd.com 11 Summary real estate market estimate
ApproachEstimateMissing Top-down Residential 110 billion Offices 53
billion Retail, industrial and other Bottom-upProfessional managed
118 billionSmall private investors GDP 96 billion
TransactionsCommercial real estate 87 billionResidential Total
market size is 197 billion ( 87 billion commercial plus 110 billion
residential) of which 118 is professional managed DTZ (2011)
mentions a total market size of 196 billion
Slide 12
IPD 2011ipd.com 12 Agenda Introduction Literature review Real
estate market size estimates Top down Bottum-up Theoretical
estimates Based on transactions Debt and equity Market
structure
Slide 13
IPD 2011ipd.com 13 Equity top down Real estate equity
investments by Dutch institutional investors also non-domestic
investments Source: Statistics Netherlands
Slide 14
IPD 2011ipd.com 14 Equity top down Real estate investments by
Dutch institutional investors also non- domestic investments
Source: Statistics Netherlands
Slide 15
IPD 2011ipd.com 15 Equity bottum up Equity in real estate
investments in the Netherlands in billion InvestorType of
investmentEstimate of equity Pension funds and insurance companies
Listed funds 3 billion Non-listed funds 20 billion Direct holdings
18 billion Private investorsNon-listed funds 4 billion Direct
holdings (only > 100 million) 15 billion Direct holdings (only
< 100 million)Unknown Non-domestic investors Listed, non-listed
and direct investments 12 billion Total Equity 72 billion
Slide 16
IPD 2011ipd.com 16 Debt top down Debt determined by annual
reports banks - 55 billion Dutch banks > only Dutch real estate
and no development exposure - 9 billion non-domestic banks - 1
billion corporate bonds - 4 billion direct CMBS/RMBS transaction no
securitisation Total debt 69 billions
Slide 17
IPD 2011ipd.com 17 Debt bottom up Debt in real estate
investments in the Netherlands in billion InvestorType of
investment Estimate of debt Pension funds and insurance companies
Listed funds 3 billion Non-listed funds 7 billion Direct holdings 0
billion Private investorsNon-listed funds 10 billion Direct
holdings (only > 100 million) 17 billion Direct holdings (only
< 100 million)Unknown Non-domestic investorsListed, non-listed
and direct investments 9 billion Total Debt 45 billion
Slide 18
IPD 2011ipd.com 18 Agenda Introduction Literature review Real
estate market size estimates Top down Bottum-up Theoretical
estimates Based on transactions Debt and equity Market
structure
Slide 19
IPD 2011ipd.com 19 Market structure Debt and equity in real
estate investments in the Netherlands in billion InvestorType of
investmentEstimate of equity Estimate of debt Total Pension funds
and insurance companies Listed funds 3 6 Non-listed funds 19 7 26
Direct holdings 18 0 18 Private investorsNon-listed funds 4 10 14
Direct holdings (large > 100 million) 15 17 32 Non-domestic
investors Listed, non-listed and direct investments 12 9 22 Total
market professional managed real estate investments 72 45 118 Top
down approach (total real estate investments) 128 69 197 Small
private direct investors (< 100 million) 55 24 79
Slide 20
IPD 2011ipd.com 20 Market structure Market structure of
professional managed real estate in the Netherlands (excluding
private investors < 100 million) amounts in billion Debt (Dutch
banks) Equity (Dutch) Debt (non- domestic banks) Equity
(non-domestic) Dutch real estateNon-domestic real estate 9 37 35 72
96 118 12 59 38 Conclusions LTV 40% is low compared to European
average of 60% Size of 118 billion is larger than earlier estimates
Low Dutch exposure by non-domestic investors (18%) Large
non-domestic exposure by Dutch investors (43% of total
exposure)
Slide 21
IPD 2011ipd.com 21 Further research Carry out more research on
market sizes in other countries Carry out market sizes per sector
within a country (offices, retail, industrial and residential)
Estimate isnt stable over time so yearly updates would be preferred
Probably not all private investors and separate accounts are
included in the figures Market size of owner occupied market for
commercial real estate is unknown (retail, offices and
industrial)
Slide 22
IPD 2011ipd.com 22 IPD Nederland Busplein 30 1315 KV Almere
Nederland Tel: +31 88 328 2200 Fax:+31 88 328 2201
www.ipd.com/netherlands Intellectual Property Rights and use of IPD
statistics as benchmarks Whether in the public domain or otherwise,
IPD's statistics are the intellectual property of Investment
Property Databank Limited. It is not permissible to use data drawn
from this presentation as benchmarks. Investment Property Databank
Limited (IPD) 2011. Database Right, Investment Property Databank
Limited (IPD) 2011. All rights conferred by law of copyright and by
virtue of international conventions are reserved by IPD