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US listed market points way for specialist real estate
Date: 30 March 2012
Institutional investors can play a key role in bringing new niche real estate markets such as senior housing, healthcare and education to maturity, according to Maarten Vermeulen, Director Europe at Composition Capital Partners. Strong demographic trends in the healthcare and student housing markets made these segments particularly attractive, he noted.

‘Many small and mid-sized companies are very demand-oriented,’ he said, pointing to new facilities and treatments that are emerging for dementia and back pain. ‘But they are not capable of getting access to capital markets. Composition has picked up on this trend. Our strategy for Europe is focused on alternative sectors that will emerge alongside traditional sectors.'

Vermeulen was one of the panellists at a seminar organised earlier in late March by Composition Capital Partners on how to secure sustainable long-term returns in real estate. The Dutch office market faces one of the highest vacancy rates in Europe and the number of vacant retail stores is also growing. Other mature markets in Europe face similar issues.

Composition Capital is currently raising new funds in a bid to build a bridge between small local specialists and institutional investors, said Composition Capital’s founding director Erwin Stouthamer. Traditionally a fund-of-fund specialist, Composition Capital is now also weighing more joint venture structures, Stouthamer said: ‘We want to give specialists in healthcare and renewable energies a push. We should not look at the expertise that already exists in real estate development but should look where there is demand. We believe in the strength of small local players. In working with our small and mid-cap operating partners, there is capacity for focus on responsible governance and long-term, balanced relationships to the good of all.’

The US listed real estate market points the way in terms of new segments, said Lara Muller, head of CSR at Dutch listed retail specialist Corio. pointing to US REITs specialized in healthcare, prisons and other areas of public real estate. ‘European governments face huge budget deficits and institutional investors are keen to invest in these types of real estate,’ she noted.

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