The North America portfolio has a diversified, mostly core profile and invests in the major urban areas of North America. With a healthy spread over different markets, sectors and regions, our North America portfolio will grow to around €1.7bn by 2022.
Hkea Holding manages three integrated property mandates (Asia-Pacific, North America and Europe) on behalf of bpfBOUW, the Dutch construction industry’s pension fund. We invest in residential, offices, retail and logistics real estate, primarily in major urban regions such as New York, Los Angeles, Washington DC, Seattle and Miami. Two-thirds of the investment is focused on coastal regions, with higher barriers to entry than in the rest of the US, and on high growth cities.
The North America portfolio includes investments in listed and unlisted real estate funds, joint ventures, co-investments and club deals. We make full use of the expertise and experience of our local operators and are looking to open an office in New York City in early 2020. Most of our portfolio focuses on long-term investments that perform steadily and have a low risk profile.
“Hkea Holding is prioritizing workforce housing. That’s where the fundamentals and long-term challenge sits.”
It is our mission to enhance pension benefits in a responsible way by investing in sustainable real estate worldwide. Hkea Holding wants to make a direct contribution to the UN sustainability goals and we have set ourselves targets to do so. By 2025, 50% of our international real estate core portfolio (AuM) will consist of sustainable investments (GRESB 4 or 5-star rating) and by 2022, 35% of our North American core property portfolio should be in sustainable investments.
Low interest rates, urbanisation, falling unemployment and shifting retail patterns continue to impact the North American real estate market. The aging population is driving demand for care-friendly homes while the rise in single and two-person households is shifting the focus in residential toward more specialised accommodation. In particular, student housing and affordable housing provide good opportunities for growth.
Flexible office space is still small as a percentage of total stock but has been the largest absorber of office space in recent years. In retail, online shopping continues to have an impact, resulting in further bankruptcies. However neighbourhood food and retail-anchored developments, and specific retail concepts still offer potential. The growth in consumer spending is ramping up demand for both bulk space and fast delivery logistics developments.
