Bloomberg News

ASR Sets Up $1.6 Billion Property Fund to Sell Dutch Assets

June 30, 2011

(Updates with plans to diversify outside the Netherlands in the third paragraph.)

June 30 (Bloomberg) -- ASR Nederland NV, the insurer acquired in 2008 by the Dutch state to help bail out Fortis Bank NV, plans to sell most of its 1.1 billion euros ($1.6 billion) of stores and shopping centers by setting up a fund.

The Utrecht-based insurer, the third largest in the Netherlands, transferred 210 properties to its new ASR Dutch Prime Retail Fund and hired CB Richard Ellis Group Inc. to find investors in the fund, according to a statement today. ASR plans to keep 20 percent of the fund, which will be run by its ASR Real Estate Investment Management unit.

ASR has owned real estate assets directly for more than 100 years and the sales mark the start of a plan to invest outside the Netherlands and to place its money in property indirectly. The company started with the sale of its retail properties because of demand from investors, who have been attracted by the resilience of rental incomes they generate and of the buildings’ values.

“The launch is a strong signal to the market of our future ambitions,” said Dick Gort, chief executive officer of ASR REIM, the company’s property asset-management unit, which owns or manages 4 billion euros of buildings. ASR hasn’t decided yet on how the sale proceeds will be reinvested, he said.

ASR plans to follow with more specialist funds to reduce its other holdings in Dutch offices, residences and farmland, Gort said in a telephone interview.

The company shift in strategy coincides with changes in capital requirements for European insurers and as the Dutch government prepares ASR for sale. The Solvency II proposals require insurers to set aside more money in case of a collapse in the value of properties they own directly. This makes investing in funds, publicly traded real estate companies and real estate loans more attractive.

--Editors: Jeffrey St.Onge, Andrew Blackman

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net


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