Blackstone – Our Investments in the Dutch Housing Market

MARCH 9, 2021

Blackstone is a global investment business investing capital on behalf of public and private sector pension funds, insurance companies, university endowments, institutions and individuals. In particular, our investments help support the financial security of tens of millions of retirees across the world, including in the Netherlands.

Our mission is to create long-term value for our investors through the careful stewardship of their capital. We invest across the alternative asset classes in private equity, real estate, credit, and hedge funds as well as in infrastructure, life sciences, insurance, and growth equity. Our efforts and capital grow hundreds of companies and support local economies. Currently, our portfolio companies in the Netherlands directly employ over 3,200 people across the country.

Blackstone’s investments in the Dutch housing market explained

Blackstone is committed to providing sustainable, high-quality and professionally managed rental housing in the Netherlands.

We believe our investments contribute to local economic growth through taxes and job creation. Our European Core+ Strategy has invested over €60 million to date to create value by substantially renovating and improving the sustainability of our properties in the Netherlands. 70% of these properties are over 100 years old and have not been invested in for decades.

This includes investing in foundation work, roof and wall insulation, double glazing, and replacing lead plumbing, heating and electrical systems. The full renovations target a A or B energy certificate, helping to support the Netherlands’ sustainability goals.

Since we entered the Dutch housing market, no income has been distributed to Blackstone’s investors. 100% of all income has been reinvested directly back into our funds’ properties.

How many properties does Blackstone own in the Netherlands?

One of the funds we manage, a Core+ perpetual capital vehicle, owns approximately 1,800 out of more than 3,300,000 rental properties in the Netherlands – a small fraction (0.05%) of the rental housing stock.

What kind of housing does Blackstone provide?

Our priority is to build a sustainable, high-quality and professionally managed residential portfolio, adding much needed supply to the Dutch housing market. We strive to deliver the highest quality service for our tenants.

The assets acquired to date are inner-city rental properties previously owned by other investors. Blackstone-managed funds do not (and there are no plans to) acquire owner-occupied properties (buy-to-let).

Blackstone funds are not competing with local home buyers.

How do you contribute to the Dutch economy?

We bring foreign direct investment which helps to support the local community and economy, pay taxes, train and employ thousands of people, and contribute sustainable housing improvements to support national sustainability goals.

Blackstone’s investment funds have paid hundreds of millions of euros of tax in the Netherlands. We have always been fully compliant with Dutch law and pay all taxes due.

Our funds’ portfolios’ also employ over 3,200 people in the Netherlands who pay their own taxes, and our assets engage hundreds of third-party contractors and advisors who in turn pay taxes and employ hundreds, if not thousands of people in the Netherlands.

Who benefits from Blackstone’s investments?

We believe our investments in the Dutch housing market will benefit our tenants, our investors (which are primarily made up of public and private sector pension funds, insurance companies, and university endowments), and the Dutch economy as a whole. 

Blackstone is focused on providing high quality service to our tenants. We run tenant surveys and train our property managers to ensure our tenants’ needs are heard and addressed in a timely fashion.

Our fund has invested over €60 million Euros to date to improve our Dutch residential properties, many of which were acquired in poor condition and in need of repair and maintenance. 

We are investing in housing through our perpetual, Core+ real estate strategy. This is a long-term strategy which invests the money of public and private pension plans, including the pensions of workers in the Netherlands, among others.

Our funds’ portfolios also employ over 3,200 people in the Netherlands and our assets engage hundreds of third-party contractors and advisors who in turn employ hundreds, if not thousands of people in the Netherlands.

How does Blackstone determine its rental rates?

Rental rates are set according to the Dutch housing system. The prices of free-market rental properties are set at market rates and any properties that Dutch regulations and WWS points require to be leased in the regulated sector are set at the regulated price.  

What housing contracts does Blackstone use in the Netherlands?

Contracts are based on Dutch ROZ Raad voor Onroerende Zaken contracts – the general market standard used by all professional landlords in the Netherlands.

How do you support tenants in financial hardship?

Our approach is aimed at a high occupancy rate, based on a positive long-term relationship with tenants.  We offer rental payment plans for tenants experiencing financial hardship and, during Covid-19, provided personalised support for anyone directly impacted by the pandemic, including offering interest-free rent deferrals.

Prior to Covid-19, we proactively adopted a policy of limiting free market rent increases to CPI + 1.5% for 4 years (CPI + 1.0% for mid-range <€1,000 p.m. properties) and, in addition, we limited rent indexation to CPI only after the outbreak of Covid-19 in 2020.

What causes price increases in rental housing in the Netherlands?

Latest Government statistics show there is a national shortage of 278,000 homes in the Netherlands. This shortage is projected to increase to 317,000 homes by 2024, and even at the current new production rate there will still be a shortage of 179,000 homes in roughly 2035.

Underlying this is population growth. Since 2012, predating investments made by Blackstone-managed funds, population growth in the Randstad region (Amsterdam, Rotterdam, Utrecht, The Hague) has outpaced supply growth by 20%. This supply-demand issue can be solved by creating additional housing.

Blackstone funds have no influence on the total housing supply. The Blackstone-advised real estate funds own just 0.05% of the total rental stock in the Netherlands (c.1,800 units) out of more than 3,300,000.

Do you ever have unoccupied properties?

Our aim is to never leave properties deliberately vacant unless it is due to ongoing or imminent renovation work.

In some cases, the units our funds acquire are already empty and in poor condition, requiring renovation work before they can be made available for tenants again.

Given the scale of the renovation and the time taken to secure the necessary building permits to ensure we meet all local regulatory requirements, this can take up to 12 months.

Between April 2019 and December 2021, our local management company delivered and leased 521 high quality, newly renovated homes. We anticipate any remaining vacant units currently undergoing renovation will be fully leased over the course of 2022.

Do you follow local housing regulations and laws in the Netherlands?

Yes. We are investing significant amounts to create high-quality housing where people want to live, while creating jobs and contributing to the local economy. We always fully abide and often exceed local regulations and laws in every market in which we operate. You can find out more about our global approach to housing here.

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