ASR Sets Up $1.2 Billion Fund to Sell Dutch Rental Home Assets

ASR Nederland NV, the third-largest Dutch insurer, set up a fund to sell some of its 855 million euros ($1.2 billion) of Dutch residential rental properties as the company cuts its holdings of less-liquid assets.

“The Dutch housing market, and the rental market in particular, is not unattractive and we are seeing interest from investors,” Roel Wijmenga, chief financial officer at the Utrecht, Netherlands-based company, said in an interview today. “A fund has been set up internally” and a first tranche could be sold soon, he said.

ASR’s real estate holdings amount to about 3 billion euros ($4 billion), or about 10 percent of total investments, the company said in a presentation. Besides apartments and family houses, the portfolio includes 754 million euros of stores and shopping centers and 962 million euros of rural properties. ASR has owned real estate assets directly for more than 100 years, according to its website.

The firm doesn’t plan to expand its holdings of apartments and homes even though prices have dropped more than 20 percent since 2008.

“While it’s a solid portfolio that offers nice returns, especially in a low-interest rate environment, real estate is less liquid than equities for instance,” Wijmenga said. “That limits the amount you can have on your balance sheet.”

Solvency OK

The property sales aren’t about boosting the company’s solvency ratio, which is solid, Wijmenga said. The ratio, a measure of an insurer’s ability to absorb losses, stood at 283 percent at the end of June, the company said in a statement today. That is more than twice the minimum level required by the Dutch central bank.

“The fund exists and we’re technically ready,” Wijmenga said. Investors may stand to benefit from housing-market reforms planned by the Dutch government.

“It looks like the rental market will have to be liberalized and housing associations will have to return to providing affordable housing, while consumers are more hesitant to buy,” said Wijmenga.

The company earlier sold parts of its stores and shopping centers through its Dutch Prime Retail fund, with more than 1.2 billion euros in assets. The fund has an expected return of 7 percent to 9 percent, according to its website.

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