Bayside goes Dutch for more distressed Netherlands buys

Opportunistic investor Bayside Capital is moving deeper into the distressed Dutch property market, with two further acquisitions.

The US-owned investor has agreed its second acquisition with joint-venture partner and industrial property specialist M7 Real Estate, a circa €30m purchase of light industrial properties in the Randstadt area.

It is also in exclusive discussions to buy a €70m portfolio of six or seven offices and a shopping mall, according to Debtwire. The vendor is a fund run by German fund manager IVG Immobilien, which has just been rescued by its lenders.

Bayside made its first Dutch investment last November via the MBay Netherlands joint venture, when it bought over 1m sq ft in 12 multi-let industrial estates for €36m from three  mandates managed by Valad Europe, including one for AXA.

The deal was financed with 5% debt from Starwood Capital. Ahmed Hamdani, Bayside’s head of European real estate and asset-backed investments, said the firm is targeting “low hanging fruit” in the Dutch market, often offered by liquidating funds at below replacement cost.

“We got a high yield in the low teens and had time to wait for the cycle to turn,” he said of the first buy. Bayside concentrates on markets where there is “dislocation” in the banking sector: the Netherlands, Spain, Ireland, and the UK.

Dutch investment turnover last year rose 27%, according to Savills, with €1.3bn of the €3.4bn traded taking place in Q4, as appetite for Dutch property increased in tandem with owners’ willingness to sell non-performing assets.

The Dutch retail sector has recovered particularly strongly, with €600m transacted in the first three months of this year, including the sale of a €213m retail portfolio by Corio to a joint venture between Mount Kellett and Sectie5.

Bayside is also focused on markets that are less competitive. It has a large deal lined up in Romania, buying a €500m non-performing loan portfolio from Austrian Volksbank, in partnership with another fund and a bank.

In Italy, it has submitted a binding bid for a book of real estate non-performing loans with a face value of €100m being sold by an Italian regional bank.

Rounding off its third deal in the past two weeks alongside the Italian transaction and the latest Dutch industrial purchase, Bayside is acquiring a portfolio of nine UK office buildings and six light industrial properties.

The purchase is being made through a new joint venture with specialist industrial asset manager Bauer Group.

Bayside plans to launch its first dedicated real estate opportunities fund for Europe in the next three or four months.

The $500m-plus vehicle will target properties, loan portfolios and direct lending, across the industrial, residential, office and hotel sectors.