Last year was another good year for Bouwinvest. We saw a strong recovery on the real estate markets, both in the Netherlands and globally. This led to good returns in our Dutch and International portfolios. More importantly, virtually all our funds outperformed the industry benchmarks on a long-term base, which shows that our investment strategy is working and that we are making the right choices. We invested a total of € 782 million last year, with € 522 million in our Dutch portfolio and € 260 million in international investments. This was lower than the record investment of € 1.1 billion in 2014, but was still a good performance given the fierce competition on the market and our strict quality criteria.
We made progress on a number of fronts and in line with the investment plan of our investor bpfBOUW. Our assets under management grew once again, to € 7.5 billion from € 6.7 billion at year-end 2014, despite the Office Fund’s disposal of a large portfolio of offices that no longer meet the Fund’s strategic premises. We also continued to improve the diversity of the portfolio, adding assets to both our Hotel and Healthcare funds and internationally increasing our Asia-Pacific and Listed allocation. We see a lot of potential in the healthcare real estate sector, given the combination of ageing of the population and higher life expectancy.
We retained our existing investors in our Dutch sector funds and welcomed eight investors to our main three funds. This means we have now welcomed a total of 11 institutional investors (in addition to bpfBOUW) to our funds in just over two years. Of course, this has helped us achieve another of our targets, which was to diversify the funding for our investment funds.
This underlines the growing interest in real estate investment among institutional investors. Real estate is a perfect long-term investment for pension funds and other institutional investors with long-term commitments. Returns are stable and relatively strong, compared to stocks and bonds. In addition, risks are under control and real estate offers institutional investors the opportunity to diversify their investment portfolios. Real estate also enables them to create value – beyond the financial benefits – in society as a whole. It provides homes, creates employment and is a very tangible investment, you cannot underestimate the importance of that element.
We believe these factors will continue to drive investment in the real estate sector in the years ahead. Looking to the future, we are convinced that investors want to choose whether they invest in the Netherlands or on an international level. The Netherlands is just one small part of a global market, which is itself getting smaller and smaller as the world’s major markets, like the United States, Europe and the Asia-Pacific region, become increasingly transparent. We can benefit from this globalisation, as we have built up a lot of experience and expertise in international real estate. After all, we currently have some € 2.6 billion invested in international real estate, via both listed and unlisted funds, with healthy returns.
Bouwinvest realises its investments strategy with a team of 140 people (131.1 FTE), all based in Amsterdam. We have the right strategy and the right focus, plus we have solid and sustainable partnerships with the best local experts. Because just as we focus on our core regions in the Netherlands, we focus on what we believe are the core regions on a global scale and the investment managers based in those regions.
Due to continuing urbanisation around the world, we believe the biggest growth – and the biggest increases in value – will be in the major cities of certain countries or regions. So on an international level we focus very specifically on major cities in what we see as the future powerhouses of the global economy. Of course, we invest in markets that have transparent real estate sectors, plus we work with partners that have solid track records and that reflect our own focus on quality. We and our anchor investor are convinced that this international investment strategy will provide solid returns long into the future. Which is why bpfBOUW has decided to increase the strategic proportion of international investments to 40% of its assets under management. The remaining 60% will remain invested in our five Dutch sector funds.
This faith in our international investments was certainly justified in 2015, as our international portfolio delivered an outstanding return of 19.2% on its listed and unlisted funds, with some help from a strong US dollar. We are of course very pleased to report that our five Dutch funds also delivered good performances last year (8.7%). We booked an overall return of 12.8% and on a weighted average outperformed the market.
Of course, all of this puts very heavy demands on the Bouwinvest organisation. The good news is that last year we once again made significant progress on a number of fronts at an organisational level. As part of our operational excellence drive, we renewed and improved the risk reporting of our portfolio and bpfBOUW’s entire portfolio. We also conducted integrated integrity risk analyses and arranged integrity training courses for all our people. Our efforts aimed at creating a pleasant and challenging working environment are also paying off. Last year, no less than 95% of our staff participated in our employee engagement survey. Our score for employee satisfaction improved once again, to 8.0 from 7.8 in 2013.
On the CSR front, we are all proud that our three main sector funds were awarded GRESB Green Star status for the second year in a row. Of course, we will have to work even harder to retain this status, as sustainability criteria will only become stricter and more important in the future. But that is part and parcel of our mission – to generate solid returns in a responsible manner – and inherent in our commitment to the long-term quality of our portfolio.
All that remains is for me to thank all our employees for their commitment, dedication and hard work over the past year. We can all be very proud of what we achieved in 2015.
Last year, we bid farewell to Marjanne Sint as vice-chairman of the Supervisory Board. We would like to thank her for her commitment and inspiration over the past eight years and her contribution to Bouwinvest’s success. We wish Marjanne every success in the future. Her seat has been taken by Carolien Gehrels, whom we welcomed as new member in July 2015.
Dick van Hal, Chairman of the Board of Directors and Statutory Director