‘We want to be the friendly landlord in the Netherlands’
Swedish real estate giant Heimstaden is the largest foreign investor in the Dutch housing market. What are the ambitions in Groningen of this commercial investor, who claims to work from a social heart? We asked the director Eddo Rats of Heimstaden Netherlands.
In 2019, Heimstaden suddenly became a party that counted in Groningen. It bought some 650 homes – mostly social housing – in City and County from British investor Roundhill Capital. The company also took over a few hundred homes from the British in Friesland and Drenthe. And it will not stop there, says Heimstaden director Rats.
At the office of Heimstaden Nederland in Amsterdam, Rats talks about the plans of the real estate multinational in the Netherlands and in Groningen.
Concrete plans of Heimstaden
Heimstaden’s most concrete plan is to open its own office in the city early next year, says Rats. The maintenance and management of home ownership in the Northern Netherlands will be arranged from here. ‘Because we want to be close to our tenants and have a face in the region where we operate.’
Rats has experience in both the real estate world. He worked for Vesteda, the largest commercial home owner in the Netherlands, and was employed by the Amersfoort housing corporation De Alliantie. Rats feels that ‘the best of those worlds come together’ in Heimstaden.
Active under the radar
Heimstaden has been operating somewhat under the radar in the North. Even the new tenants barely have any added date they have, because the management of their homes remained in the hands of the same party.
But that will change when Heimstaden takes care of the management itself and starts driving its own maintenance vans here.
What are Heimstaden’s plans in Groningen?
‘We are going to start making our 650 homes in Groningen more sustainable. we want to talk to municipalities and other housing associations to see what we can do together. In Wageningen and Rotterdam, for example, we work together with other housing associations in a heat network, and in North Holland our homes are part of the housing distribution system of the housing associations.
I foresee a similar path in Groningen. We are very interested in the activities of the Groningen corporations and would like to see how we can grow. And maybe there are activities that we are developing that they can get involved in.’
Can you elaborate on that?
‘Suppose a corporation wants to make its property more sustainable by insulating solar panels and we have homes in the same neighbourhood. Then we would like to participate in that. We will also strive for quality of life. We will do this ourselves in the first place, but where possible also together with other housing associations.
If a corporation has a community center somewhere or a place where they develop activities, we can participate there. Also when it comes to maintenance of the immediate living environment.’
You put the visible on social genomes. Is that a thing of the past with the revenue model of a commercial company?
‘What we want is to be the most friendly landlord in the Netherlands. That has a social face. We are originally a Scandinavian home lessor who is committed to comfortable and sustainable living. We want to improve the lives of residents. This also includes the living environment.
We are here for the long term, we buy homes for a long twenty years, preferably longer. We are not a project developer who builds and develops. And we also do not bid on owner-occupied homes. When we build new, we do that to expand the property and rent it out.
We do not sell the homes. We keep them and assume the operating return. That is also the reason why we invest in making homes more sustainable. because we have every interest in our homes being well maintained and not.’
More seven out of ten homes in the Heimstaden portfolio are in the social rental sector. Corporations say: we are unable to make a profit with such homes.
‘I myself have also worked in that sector and I know that it is for corporations because of laws and regulations. Housing associations have a number of characteristics that we do not have as a commercial company. We do manage to make a return on the homes in the lower rental categories.’
Isn’t it much more obvious to invest in homes in a higher rental segment? Isn’t that much nicer to earn?
‘I don’t know that the liberalized rental sector is so much better earned. We believe it is important that a functioning, diverse city is created. That’s our job.
Incidentally, homes from our social rental stock will go to the middle segment. We will discuss how this will develop with housing associations and municipalities in the area.
We believe that a corporation like Nijestee will bring some of the regulated segment to the middle segment, because there is a need for those homes. And at the Lefier housing association, the stock of social rental housing is substantially lower. I think we can figure out who will play which role.’
Your founder and major shareholder Ivar Tollefsen has a fortune of four billion dollars, according to the American business magazine Forbes. How did that happen with a social landlord?
‘I don’t know exactly where he made his money. he started with Heimstaden had developed all kinds of other activities.
I can imagine from the reader’s perspective that the founder’s assets are to Heimstaden in the Netherlands, but I don’t see that relationship that way. He is a major shareholder, but we also have other shareholders.’
Heimstaden now has 650 homes in Groningen, what are the plans for expanding the property?
‘We buy up existing rental properties and rent them out. However, there is currently little for sale in rental properties. As far as we are concerned, building is therefore the task, also for groups that have difficulty finding housing, such as young people, students, the elderly and vulnerable groups. you have to look at what is needed in the long run.
We try to find the right partners for this. We are only at the beginning of that process, let’s talk with words first.”
Who and what is Heimstaden?
Heimstaden was founded in 1998 and was acquired in 2005 by Fredensborg, the company of Norwegian Ivar Tollefsen, the current major shareholder of Heimstaden. The real estate giant set foot on the Dutch housing market in 2018 and is now the largest foreign investor there. In 2019, he became one of the larger home owners for 1.4 billion euros, purchasing 9544 rental homes in the Netherlands from British investor Roundhill Capital.