a.s.r. real estate

Impact COVID-19 on a.s.r. real estate funds

The coronavirus (COVID-19) was declared a global pandemic by the World Health Organization on 11 March 2020. Dutch society was subsequently placed under an “intelligent lockdown” with restrictions on public life and unprecedented limitations imposed on the country’s economic activities. The CPB (Dutch Bureau for Economic Policy Analysis), has presented four possible economic scenarios, ranging from a more limited short-term impact to a deeper and longer-term negative impact. To provide more insight into the consequences of the current crisis for our funds, a.s.r. real estate communicates in line with the scenarios outlined by the CPB:

CPB scenario I:          3 months of measures and recovery directly afterwards in Q3 and Q4.
CPB scenario II:         6 months of measures and recovery in 2021.
CPB scenario III:        6 months of measures, with a deeper impact on the economy and a prudent recovery in 2021.
CPB scenario IV:       12 months of measures, impact on financial sector and accompanying problems from foreign countries affecting the economy.


CPB I scenario (positive)

CPB II scenario

CPB III scenario (negative)

CPB IV scenario

GDP growth

-/- 1.2%

-/- 5.0%

-/- 7.7%

-/- 7.3%

Unemployment rate





Inflation (CPI)





House price growth



-/- 5.0%

-/- 7.5%

The residential market - ASR Dutch Core Residential Fund

In general, the residential sector is expected to be relatively stable, since the market fundamentals remain favourable and there is a structural mismatch between supply and demand for mid-priced rental housing. However, unemployment is expected to rise and decreasing consumer confidence will result in more cautious consumers. As a result, house prices growth will come to a hold or might even become negative under the more severe scenarios. The Fund’s revaluations are assumed to be in line with general property prices in the Netherlands. Furthermore, rent arrears and vacancies are likely to trend slightly upwards in all scenarios. The Fund’s outlook remains stable due to the Fund’s continued focus on core residential investments in the mid-priced rental segment, its high occupancy rates, the sound management of operating expenses, zero use of leverage and Fund’s pipeline being fully funded.

The office market - ASR Dutch Mobility Office Fund

The office market was affected by the coronavirus significantly due to the ‘work from home’ policy, which has been adopted by many office employers. However, the Fund’s properties are located in strong, future-proof locations and they house tenants with long-leases. In the second quarter of 2020, over 95% of rents payable have been received. There are thought to be more higher-risk tenants and leases in the flex-office market, but the Fund’s exposure to this sector is limited. The total return forecast under a negative scenario could reverse the total capital growth achieved in 2019. The Fund’s limited finance facility will end in 2020 and there are no immediate risks with regard to CAPEX plans for the standing portfolio or properties in the committed pipeline.

The retail market - ASR Dutch Prime Retail Fund

The retail sector has been severely affected by the coronavirus outbreak. Experience retail has suffered in particular – a category which has historically been seen as a lower-risk category than convenience retail assets. The ‘stay at home’ advice and lockdown, the absence of urban tourists and the need for retailers to adapt are all factors that have led to direct and immediate liquidity issues for tenants. As a result, we're discussing alternative payment plans with tenants, representing c. 55% of the Fund’s GRI. For 2020, a negative direct return impact is to be expected as well as a higher risk premium, possible higher yields and potential vacancy – all of which would add up to a negative total return. For the longer term, the Fund focuses on the most future-proof assets in the Dutch retail market and no sudden changes to this strategy are planned. Because the Fund is financed in a prudent manner, developments and commitments are not at risk.

Real estate on science parks - ASR Dutch Science Park Fund

The coronavirus outbreak is expected to have a limited negative impact on the ASR Dutch Science Park Fund. The Fund expects no rent arrears, since the tenants at these locations remain relatively unscathed, offering their services remotely. Companies in some sectors, such as bio-tech, have actually performed better, leading to an already perceptible rise in demand for space at bio-tech oriented locations. The Fund remains in an early phase of its growth, with five assets acquired to date (€85m). For a growing Fund, the current market conditions could create additional acquisition opportunities, which have already emerged, alongside the general trend towards a more knowledge intensive economy (read more). As such, there is continued confidence surrounding the Fund’s annual acquisition target of €100 million.

For more information on the a.s.r. real estate funds, please contact Luc Joosten.

Luc Joosten
head of Fund Management
a.s.r. real estate
M: +31 (0)6 83 64 81 85
E: luc.joosten@asr.nl