ABN Amro Bouwfonds

Property financing is the company’s main business sector, concentrating on its home Netherlands market but also providing funding for projects in France and Germany

Bouwfonds, a fully owned subsidiary of ABN Amro Bank since 2000, is building an integrated property company which undertakes development, finance and asset management. Its links with the bank have given the company added financial clout and much of this is being used to expand into new markets.

Property financing is the main area of international expansion for Bouwfonds. Bouwfonds Property Finance increased its commercial lending portfolio from €4.5bn to around €6bn in the eighteen months to the middle of last year. Much of the growth is coming from international project financing, using established relations with Dutch developers to finance foreign schemes. It is financing schemes by Dutch property company MAB, including the 100,000m2 Zeil Forum retail and office scheme (€670m) in Frankfurt and the 62,000m2 Domus furniture shopping mall in Paris (€135m), as well as providing project finance for other parties in France, Spain, Belgium and the US.

But the bulk of Bouwfonds’ finance business remains in the Netherlands, where its largest investment is a €635m provision for the Oosterdok redevelopment in Amsterdam – another MAB scheme. Also in Amsterdam, Bouwfonds is providing €100m to Imca for its 42,000m2 Millennium Tower office scheme, which has been prelet to Elsevier Science. In Rotterdam, Bouwfonds has teamed up with developers MDC and Matser to finance an €118m project including offices and luxury flats. Bouwfonds is also a major residential mortgage lender, with a €16bn portfolio.

Bouwfonds’ residential development business has expanded from its base in Holland into Germany and France, the latter through the acquisition of Marignan. The market position in the southern parts of Holland was strengthened last year through the acquisition of residential developer Stienstra.

Most of Bouwfonds’ commercial property development is undertaken in its home market and Belgium. Last year the various development units were merged into Bouwfonds Property Development, which has 20 offices in four countries and is considering other countries for expansion.

But overall, the company faces weakening markets, a problem which is compounded in the residential sector by delays in permits for large developments. The downturn in the office market is behind a change in plan for one of Bouwfonds’ largest schemes, the joint development with BPF Bouw of a 188m tower in Rotterdam’s city centre. Originally conceived as an office tower, 16 of the 50 floors will now be residential. Last year Bouwfonds agreed a joint venture with ING Real Estate and the University of Delft for the development of a 70ha site for the Technopolis business campus, which will eventually require an estimated €900m investment.

Asset management is still a minor activity for the company, but it aims to lift the value of assets under management from under €1bn to €5bn in three years. Last year’s main addition was the €400m purchase (with Inflation Exchange Fund and Mn Services) of Philips Pension Fund’s office portfolio. It will be used to back products offering inflation cover to pension funds.

Bouwfonds has found a steady stream of business by launching property investment funds. Last year it launched the second of its Distrifonds, aimed at private investors, kicking off with logistics properties valued at €81m. Bouwfonds also bought a 40% stake in ZOM Holding Inc, a residential developer in Florida. Bouwfonds’ ambitious growth target for its asset management arm suggests that more acquisitions will follow.

Financial highlights
International project financing work has increased profits
€m	Six months to	Six months to
	30 June 2002	31 Dec 2001
Total assets	22,800	21,138
Group equity	1,552	1,495
Net profit (six months)	64.3	49.8
Residential mortgages	16,000	15,200
Commercial property lending	6,000	5,000
Source: ABNAmro Bouwfonds