ING Bank has provided €120m of finance for Round Hill Capital’s purchase of the largest Dutch residential portfolio to trade since the financial crisis. The five-year debt reflects a loan-to-value ratio of 66%. ING has syndicated some of the debt to two non-Dutch insitutional players.
Round Hill has acquired 1,534 units spanning 140,000 sq m for around €180m from funds managed by CBRE Global Investors. The deal is its first foray into Dutch residential and seeds its new Round Hill Dutch Residential Investment SCS fund.
“We see similarities with the German market, where we’ve operated since 2007,” explained Round Hill managing director Kirk Lindstrom. The private equity firm invested in German multi-family housing company Vitus, with 30,000 units under management, which it this year agreed to sell to Deutsche Annington.
“The Netherlands offers an attractive risk/return profile at this time, with the market becoming more liquid in the recent past and regulatory changes occurring in the market,” he continued. ING’s financing is the second large loan made on a Dutch residential portfolio in the last three months. In March M&G Investments lent €110m against a portfolio of 1,250 homes at a margin between 175bps and 200bps.
According to Savills’ summer 2014 Netherlands Residential Market Briefing note, residential investment in the Netherlands had hit €500m by mid-May. It said the market fundamentals look sound with growing demand, limited supply and relatively low price levels. More transactions between international investors and housing associations are expected, as the latter cope with new regulations that will prompt them to consider selling non-core assets.