The year 2021 was marked by increasing concerns about global warming and declining biodiversity, the call for affordable housing, high inflation rates and - once again - the Covid-19 pandemic. Bouwinvest is very much aware of these developments and is able to respond effectively to them thanks to its sustainable and diversified portfolio. The financial returns of both Bouwinvest’s investments and its management organisation exceeded expectations in 2021.
The IPCC climate report published in August and the conference on climate change held in Glasgow in November once again stressed the enormous importance of sustainable real estate and a healthy living environment. With its focus on creating Real Value for Life, Bouwinvest aims for a healthy mix of financial and social returns. All of its Dutch real estate and 34% of its investments in international real estate are classified as sustainable by GRESB. On a national level, this is on target and on an international level it is well above the current target of 29%. Bouwinvest is still on track to be Paris Proof by 2045.
Globally, the call for affordable housing is growing louder. Bouwinvest invests in affordable rental homes, but having enough affordable housing involves a lot more than this. If the Netherlands is to build one million new homes, giving new entrants to the market and the elderly more choice, this will require investments in infrastructure, area development and sustainable innovations. This is a joint task that will require the public sector and private parties joining forces to present an overarching vision that is both realistic and achievable. This is why Bouwinvest is involved in the Housing Action Plan and welcomes the appointment of a minister with specific responsibility for housing.
The principles Bouwinvest developed in March 2020 to deal with the negative effects of the pandemic proved to be very useful once again in 2021. Internally, Bouwinvest did everything it could to keep staff – many of whom worked from home – both satisfied and engaged, and to keep communications and coordination running as smoothly as possible. The company’s high score in the widely supported employee engagement survey and the low absenteeism last year are proof that these efforts paid off. Bouwinvest kept its investors fully informed about developments in its portfolio and its funds found appropriate solutions for any tenants facing problems.
Bouwinvest's strong basis translated into positive results in 2021. Invested capital increased to € 15.7 billion and Bouwinvest recorded a total positive return of 13.2%. This result exceeded the targets set at the start of the year. Bouwinvest made new investments of close to € 1.0 billion last year. In the Netherlands, the Dutch funds invested € 271 million in a number of eye-catching investments, such as rental homes in The Hague, the majority of which are mid-market rental homes, retail units on the Lijnbaan in Rotterdam, and homes for the elderly in Hillegom. For the Europe Mandate, Bouwinvest invested in affordable rental homes in Ireland and Germany, in data centres, life sciences and logistics in North America for the North America Mandate, and in logistics in South Korea, plus housing for the disabled and data centres in Australia for the Asia Pacific Mandate. Last year, Bouwinvest welcomed 10 new clients, taking the total number of clients to 36. New and existing clients committed a total of € 376 million to the open Dutch funds. In addition, the management organisation performed above expectations, recording a return of 16.8%.
Of course, none of this is reason to be complacent. At 7.1, customer satisfaction is below our target of 7.5. And we want to continue to improve the sustainability scores of our international investments. Bouwinvest charges management fees that are in line with or below market rates, but if we are to continue to do this we will continue to devote constant attention to the efficiency and effectiveness of our business operations.
It is still too early to even guess at the consequences of the war in Ukraine. First and foremost, our thoughts go out to the people affected by this conflict. As a major residential landlord in the Netherlands, Bouwinvest is in talks with a number of municipalities on housing for refugees from Ukraine. In addition, Bouwinvest regularly screens its business associates, including checks against sanctions lists. Specifically with respect to Russia and Belarus, we have found no violations of sanctions legislation. Incidentally, Bouwinvest has no exposure to real estate in Russia, Belarus or Ukraine.
Institutional investors are rapidly being confronted with new or stricter regulations, including those on the sustainability performance reporting front, the need to test the integrity of business partners, and the expansion of privacy and tax criteria. Internally, we have also devoted a great deal of attention to the dangers of cybercrime. Because of its size, Bouwinvest is in a good position to respond effectively to these developments.
Real estate remains a growth market, certainly on an international level. A great deal of real estate still needs to be developed globally, especially in residential, logistics and healthcare real estate. This will require a great deal of capital, and that capital is readily available. Bouwinvest will continue to maintain a strong presence in the Netherlands, but is becoming increasingly active internationally to achieve healthy diversification. Important criteria on this front are strong economic outlooks, transparent investment markets and sustainability. Building on this, Bouwinvest has a strong preference for the United States, Western and Northern Europe, and fast-growing metropolises in Asia.
Thanks to its market position, size and organisation, Bouwinvest is in a good position to play a significant role in its markets and we will continue to develop along the three main themes of professionalisation, responsible investment and controlled growth. Part of this controlled growth is the development of new product/market combinations.
Looking back at 2021, I would like to thank our clients for their understanding and undiminished confidence in Bouwinvest. Our results underline the fact that our staff kept everything running smoothly, despite some severe constraints. I would very much like to thank them for that. Finally, I would like to thank our Supervisory Board members for their advice and constructive supervision.
Dick van Hal
CEO and statutory director