Real estate
Strategy and targets
COTG 3CtivitiGS FGH Bank and Rabo Vastgoed
Review of activities
Market and clients
FGH Bank
46 Rabobank Group Annual Report 2004
Core activities
Rabobank Group's real estate operations, which comprise FGH Bank
and Rabo Vastgoed, had a good year. In difficult market conditions,
FGH Bank provided a record amount in new loans. Rabo Vastgoed
considerably expanded both its land and its order portfolio. Operating
profit before taxation of the real estate division was EUR 85 million.
As in 2003, the Dutch commercial real estate market and the office
market in particular was depressed, although the rise in the supply of
office space came to a halt after a number of years. The retail market
showed a stable development in 2004. Supply in the retail market was
low and the renting of new development projects continued satisfactorily.
Partly because of the share market's continued underperformance, the
real estate market remained attractive to investors in 2004. Accordingly,
there was a strong emergence of real estate companies and limited
partnerships (CVs) during the year under review. FGH Bank benefited
from the withdrawal of a few (foreign) banks from the Dutch market.
In 2004, the housing market managed to steer clear of the economic
recession, with both prices and volumes higher than in the previous
year. The fact that the housing market remained relatively buoyant was
mainly due to low interest rates in the capital markets and the lagging
production of new houses.
Real estate division in the making
Rabobank Group operates in the real estate market through its subsidi
aries FGH Bank, Rabo Vastgoed and Interpolis Vastgoed. At the end of
2004, it was decided to cluster all Rabobank Group's real estate activities
as far as possible in a real estate division. This would create a single cen
tre of expertise and maximum collaboration. In addition, it would give
Rabobank Group a higher profile in the market. The real estate division
will come into being in 2005.
FGH Bank specialises in financing commercial real estate. With its nation
wide office network, the bank not only operates near to the client but
can also keep up-to-date on regional and local developments. FGH Bank
focuses on institutional and private investors in commercial real estate
and on project developers. Early in 2004, FGH Bank acquired De Lage
Landen Vastgoedfinanciering from De Lage Landen.
FGH Bank achieved a record production of EUR 2.4 billion, even though
the number of transactions in the total Dutch market was not particularly
high in 2004 as a result of the scarce supply of high-value real estate.
In the year under review, FGH Bank's loans portfolio increased by EUR 2.4
billion to EUR 6.5 (4.1) billion, of which EUR 1.1 billion is attributable to
De Lage Landen Vastgoedfinanciering. Growth in project financing slowed
because few projects were developed in 2004 as a result of the market
situation. Around 69% of FGH Bank's portfolio relates to investment
financing, 10% to financing of property for own business use, 8% to
'uitpond' financing (sale of rented property) and 13% to other lending
(project, land and trade financing).
Strengthening the position in the Dutch real estate market.
Annual growth of market share
Achieving a top position in commercial real estate financing and
in owner-occupied housing
housing project development.
projects of at least 20%
Achieving a selective position in the market for commercial real estate
Annual growth of the loans
development, with the focus on the development of shopping centres.
portfolio of at least 10%
