Amsterdam, March 2, 2023
Being proactive and knowing where opportunities lie are the prerequisites for effective and efficient (real estate) asset and investment management for Tijs Derison and Rick Verstappen of Profound. They explain how to make a difference in a changing and uncertain market.
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Tijs Derison and Rick Verstappen are both managing partners at Profound. Over the past fifteen years, they have experienced various market conditions. “It is crucial to focus on proactive asset and investment management, especially in changing and challenging markets.”
The European real estate investment market is more difficult than in recent years, partly due to challenging financing conditions. More focus is necessary to add value within existing portfolios and create opportunities. To execute this proactively, it is important for asset and investment managers to have deep-rooted knowledge of local real estate markets and visibility among various market parties.
Local Eyes and Ears
“Many international parties seek local reinforcement by setting up their own teams or engaging a locally recognized partner like Profound,” say Derison and Verstappen. “Institutional parties, in particular, increasingly realize that a large real estate portfolio cannot be managed remotely and that local eyes and ears can provide a significant competitive advantage.”
Collaboration with the Right Partners
Last year, Frans Peter Daemen and Rick Verstappen decided to join forces with Tijs Derison to focus more on the light industrial and logistics real estate segment. This asset class offers many opportunities. Now, Profound’s full service has been optimized across all segments.
This specific knowledge and years of experience have enabled Profound to enter into an exclusive mandate with a US private equity firm for which Profound seeks suitable real estate, provides acquisition guidance, and handles asset management. This institutional party specifically targets logistics buildings near major Dutch cities.
More Focus on Optimization
Having been involved in the Dutch real estate market for over fifteen years, Profound knows what is happening. Due to rising interest rates and energy prices, coupled with significant rent indexations and a relatively low supply of commercial space, parties are postponing their investment decisions. They are waiting for the markets to calm down. For an asset manager, frequent dialogue with tenants is crucial, as is insight into and understanding of tenants’ operations. The times when every building seemed to rent itself and long-term vacancies appeared to be a thing of the past have largely ended in the Dutch logistics sector as well.
Cautious User
Of course, the demand for high-quality (tenant) space in the Dutch logistics segment remains strong. But the market for smaller, less high-quality products is subject to increasingly critical and cautious users. Optimizing the real estate product in the portfolio offers opportunities to attract quality tenants. In a market where new construction is less prevalent—partly due to land scarcity, higher construction costs, and cautious developers—certain tenants still want to move to achieve growth.
Responding to Sentiment Now
For the aforementioned institutional investor, approximately 100 million euros worth of Dutch logistics real estate has been purchased over the past two years. The goal is to continue this trend unabated. Many private equity parties want to keep investing in real estate, provided they have financial coverage. Changing market conditions do not alter this. On the contrary, they offer opportunities through price movements. It simply requires a more focused approach from investment management. Profound achieves this by working with clear investment profiles and knowing and connecting the right market parties.
Investment Opportunities
Despite the interest rate hikes since mid-2022, Profound is still actively seeking suitable investment opportunities. Due to the scarcity of good products on the market, it is important to be proactive and know where the opportunities arise. Deep-rooted market knowledge is, of course, essential for this.
About Profound
Profound Asset Management (Profound) was founded in 2007 and has since grown into a full-service asset, fund, and investment management organization. Profound represents and advises a large number of nationally and internationally oriented funds and clients. The company is active in the Dutch office, retail, residential, and logistics markets.