Real estate
Strategy and targets
Core activities FGH Bank and Rabo Vastgoed
The real estate division within Rabobank was
created in 2005 and made good progress right
from the start. The collaboration between the
various real estate entities and the local Rabobanks
bore fruit immediately. Due in part to this good
collaboration, FGH Bank's loan portfolio grew and
Rabo Vastgoed obtained several very attractive
project orders. As a result, net profit increased by
22% to EUR 78 million.
Market and clients
44 Rabobank Group Annual Report 2005
The housing market in the Netherlands continued its positive develop
ment. Due in part to the continuing very low interest rate, demand for
owner-occupied houses remained strong, the price level rose and the
number of sales transactions again increased. In addition, the production
of new houses increased after a decline in previous years.
The Dutch commercial real estate market has had a few difficult years.
In 2005, the trend seemed to show some reversal, although the recovery
is still considered fragile. Supply in the office market remained roughly
unchanged in 2005 and occupancy grew slightly, so that the increase of
many years in the vacancy rate seems to have been put to a halt. The
retail market seems the most stable sector within the commercial real
estate market. The vacancy rate, although increasing, remains relatively
low. Rent levels in this segment are holding up reasonably well because
new shop formulas are entering the Dutch market and existing formulas
are seeking opportunities for expansion and upscaling.
Demand for real estate investment remains high. However, the market is
unable to meet the demand for quality and demand is exceeding supply.
Competition in the market for real estate financing grew strongly in
the year under review. This resulted in lower margins and a decline in
customer loyalty.
New real estate division
The real estate division announced in 2004 was further defined in 2005.
FGH Bank makes up the financing arm and Rabo Vastgoed the develop
ment arm. The starting points are a single centre of expertise, knowledge
sharing and optimum collaboration. Optimum interaction with the local
Rabobanks will be vital and should enable significant growth in real
estate projects and financing.
Increasing synergy
The intensive collaboration between FGH Bank, Rabo Vastgoed and
other Rabobank entities is beginning to pay off. The local Rabobanks
involve FGH Bank in larger financing applications at an early stage, so
that 15-20% of FGH Bank's new financing now comes from this channel.
Through the local Rabobanks, Rabo Vastgoed regularly comes into contact
with parties for real estate projects. Subsequently, the owner-occupied
houses from these projects are financed largely by the local Rabobanks.
FGH Bank collaborates with asset manager Schretlen Co and with the
local Rabobanks in the placement of real estate partnerships and limited
partnerships (CVs).
Strengthening the position in the Dutch real estate market Annual growth of market share in
by organic growth or by acquisitions that potentially owner-occupied housing projects
provide long-term synergies. of at least 20%
Achieving a dominant position in commercial real estate Annual growth of the financing
financing and housing project development. portfolio of at least 10%
Achieving a selective position in the market for
commercial real estate development, with the focus on
the development of shopping centres.
