Dutch pension funds reported substantially higher returns on their direct real estate returns in 2020 than on their investments in listed real estate equities during the same period.

Despite the heavy losses in segments of the real estate market as a result of the coronavirus lockdowns, the value of Dutch pension funds’ direct real estate investments as reported to pensions regulator De Nederlandsche Bank (DNB) increased by 1% to €83.5bn compared with a reported decrease of 7% to €56.7bn for listed real estate. The FTSE EPRA NAREIT Developed Europe Index, a benchmark for European real estate shares, made a -10% return in 2020.

Metal industry scheme PMT, for example, made a -9.8% return on its listed real estate portfolio, while its direct real estate investments reportedly returned +1.5%. Fellow metal scheme PME, which invests only in direct real estate, reported a +2.4% return.

PFZW, the healthcare pension fund, recorded over 11% fall in listed real estate equities, whereas its direct investments returned +0.7%.

According to a PFZW spokesperson, the discrepancies can partly be explained because the fund’s direct portfolio is “heavily invested in residential and logistics real estate”, sectors that have been less adversely affected by the coronavirus pandemic, unlike offices and retail.

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