ING Real Estate Finance has increased its lending to Dutch client Woonhave by almost 50 percent to finance the acquisition of a residential portfolio in Rotterdam.
Woonhave used the facility, enlarged from €112 million to €169 million, to buy the assets from Dutch private investor Van der Vorm. The 10-year loan is cross-collateralised against Woonhave’s total portfolio of over 2,000 residential assets, worth approximately €300 million, putting the loan-to-value in the region of 56 percent.
The financing is the second to close in the last few weeks in the Dutch multifamily sector. ABN Amro completed a €460 million refinancing for Round Hill Capital, which saw the Dutch bank arrange fresh debt with a club of insurance companies, believed to be clients of AXA.
Arie Hubers, managing director at ING REF, said this is the bank’s third transaction with Woonhave since the reidential company launched in 2014, meaning all the investor’s deals to date have been financed by ING. The bank usually lends at 5-7 year tenors but can do some longer-term lending: “We see strong demand from residential investors for longer loans and cheaper pricing is also driving demand for long tenor,” he said.
However, as with the ABN Amro refinancing, Hubers said he could see the potential for more debt capital coming into the residential sector from institutional investors. “Banks are a bit reluctant to go to longer tenors and we do see that, that is, more insurance money, happening in the future.”
Hubers didn’t comment on the pricing for Woonhave but said that margins have been falling for senior debt for residential standing investments, to the 120-150 bps range. “The recovery of the Dutch real estate market was lagging neighbouring countries and margins here were a bit higher. But what we have seen is German banks being very interested in financing residential at low leverage in the Netherlands, pushing down pricing by 30-40 basis points over the last 18 months.”
Woonhave, with a local team led by managing partner Mark van den Berg, specialises in investing in single family homes and apartments in the Randstad area which lease for €700-€1,000 per month at the lower end of the liberalised rental sector. It is backed by international institutional equity, from Aevitas Capital, which in turn is backed by giant US endowment fund, Washington State Investment Board.