Dutch firm Ramphastos Investments looks back on its 10-year ownership of the huge science park located at a former Philips site.
OPERATIONAL REAL ESTATE CASE STUDY: HIGH TECH CAMPUS EINDHOVEN
Ramphastos Investments is the private investment vehicle of Marcel Boekhoorn, a former Deloitte & Touche accountant and now a Dutch billionaire businessman. He left Deloitte to establish Ramphastos in 1994 to specialise in creating value and market leaders from selected portfolio companies. A noteworthy quirk of the company is that its headquarters are located at a zoo that Boekhoorn bought as a hobby as an animal lover.
The company is active in many industries (until recently it owned Dutch retailer Hema). That includes real estate, the largest asset being the High Tech Campus Eindhoven, which the company bought in 2012 for €425 mln.
This is one of the largest Research & Development assets in the Netherlands with around 235 companies and 12,000 people across 40 buildings.
Speaking with PropertyEU, Jan-Willem Neggers, partner responsible for real estate at Ramphastos Investments and MD of HTC Eindhoven, explained the background to the original investment and how under Ramphastos’ ownership, the mindset to owning such an operational asset has been to treat it as an ‘ecosystem’. He also revealed how the deal with Oaktree materialised.
The entire campus was once owned by Dutch conglomerate, Philips. It was the third location for Philips’ global R&D campus since its original downtown Eindhoven NatLab in 1914 which pioneered products such as the rotary shaver and the compact disc. As such, HTC Eindhoven was a proud asset but by around 2012, Philips decided to sell the campus.
It was a difficult time, given the world was still reeling from the 2008 credit crunch, so banks were not exactly queuing up to finance such a large acquisition, recalls Neggers. At the time, R&D real estate was not regarded as a category of real estate. ‘It was not well known and not something people were interested in,’ he says. ‘Nowadays, we see R&D real estate as an asset class more or less on its own. It has turned into a hot asset class. Covid has created momentum for it because we see a lot of investors that are reluctant to invest in plain vanilla offices at the moment because no one knows how occupiers will evolve.’
All types of R&D facility are present on the HTC Eindhoven site. As Neggers points out, workers cannot perform their tasks easily from home. ‘I think this is where there is a big difference between R&D real estate and offices.’
He adds: ‘Big investors are also backing out of retail investment. Then you have distribution and residential assets but those two categories are extremely expensive at the moment so there is a lot of appetite for an asset such as HTC.’
Ramphastos took over the Philips campus site management company when it acquired the asset in 2012. The ‘well managed’ culture of the Philips management company blended with the ‘more entrepreneurial’ approach from the Dutch investor.
Over time, the campus grew from 7,000 to 12,000 people. Rental income also increased, as did the number of companies leasing space. Ramphastos paid a lot of attention to marketing and sales communication and encouraged tenants to work together as one ‘ecosystem’ as they shared facilities.
Fostering an ecosystem involves many things. Being Philips’ global R&D hub, it was already an extremely important part of the Eindhoven region. Ramphastos was keen to respect that, being among five or six of the largest companies in the region. It started a fund fighting poverty and helping disadvantaged children. It also became part of a group that sponsors FC Eindhoven, the professional football team.
At the end of 2020, Ramphastos became aware that Oaktree had sold its investment in Kadans Science Partner to AXA IM Alts. Having known Oaktree for a long time through working together on real estate deals, Neggers sent an email to his contact congratulating the company on its exit. He also inquired who would be Oaktree’s partner on any new science real estate investments. ‘The idea was born to look to see if we could set up a fund together.’ But talks developed towards Ramphastos actually selling the HTC to the US company for a much larger sum than it bought it for 10 years ago.
The asset is likely to be one of, if not the largest, assets in Oaktree’s new pan Europe R&D real estate fund. Oaktree is keen to develop further space at the campus amid what Neggers calls fairly strong demand. Under the new ownership, the approach to risk will be a little different.
Ramphastos liked to wait until a company was a tenant before building new space for it, but Oaktree is happy to take more risk by developing buildings now. ‘Under the new owner, development will start very soon on the development of an additional 85,000 m² of land. Oaktree will be a very good owner of HTC Eindhoven,’ says Neggers.