Helping address affordability in Dutch real estate

The Netherlands faces a significant shortage of affordable housing, with demand for rental homes continuing to outstrip supply in many parts of the country. The pressure is particularly acute in and around major cities, where housing availability remains limited and affordability is a growing issue.

At the same time, rising construction and land costs make it increasingly challenging to develop new homes at affordable rents. New housing must also meet high sustainability standards, requiring buildings to be energy efficient, climate resilient and built for the long term.

Addressing these challenges requires significant long-term investment and a considered approach. This is where institutional investors can play an important role and, as a large long-term investor, NN is well positioned to contribute.

Sustainability has been an important focus for NN’s investment team for quite some time. ‘For more than 15 years, sustainability has been embedded in how we manage our real estate portfolio. We work with building managers and tenants to improve the energy performance of buildings, reduce resource use and support our net-zero ambitions,’ says Marieke van Kamp, Head of Private Markets at NN Group.

More recently, NN expanded its focus to include housing affordability more explicitly. In 2022, NN launched the Positive Impact Programmatic Venture (PIPV), an initiative that invests in Dutch energy-efficient and affordable homes. Investments made as part of this initiative fit both NN Group’s climate solutions criteria and its newly created social investment guidelines, which define social investments as those contributing to affordable housing, access to healthcare or access to education.

‘Unlike most of our real estate investments, the PIPV programme focuses on developing new residential assets. The objective is simple: help increase the supply of affordable rental housing while ensuring these homes meet high sustainability standards from day one,’ says van Kamp.

The programme has a target size of €500 million. To date, around half of that amount has been committed across three projects, with the first development in Eindhoven already completed and occupied. More recently, it was announced that NN had acquired a new-build development comprising 100 rental homes in Amsterdam.

‘One of the key lessons has been the importance of getting involved early. Decisions made during the design phase can have a significant impact on a building's energy performance, climate resilience and long-term operating costs,’ says van Kamp. By helping shape projects from the outset, it is possible to incorporate measures that may be more difficult and expensive to implement later in the process.

And our approach continues to evolve. ‘While the initial focus was on delivering affordable and sustainable homes, newer projects increasingly look at the wider role housing can play within a community. This includes creating shared spaces, incorporating measures that support biodiversity and contributing positively to the surrounding neighbourhood,’ says van Kamp. ‘At the same time, increasing attention is being paid to climate resilience, including the physical risks that climate change may pose to buildings and communities over the long term.’