OIMIO enables smart real estate entrepreneurs to seize opportunities
OIMIO is developing at a rapid pace into the preferred real estate financier of the entrepreneurial Netherlands. The new NIBC subsidiary combines speed, technology and a personal approach. "Real estate is about people."
Until 2020, NIBC's commercial real estate team only served the larger commercial real estate market with loans per transaction starting at EUR 10 million. The loan portfolio of this commercial real estate branch has grown to a size of around 1.5 billion euros. Financier Jeroen Belt - who has worked for NIBC for fourteen years, ten of which in commercial real estate - has, however, noticed a huge increase in the demand for small property loans of less than 10 million euros, he says.
"I didn't like the fact that we were letting that business go. Only the large Dutch banks are active in this market, but they are also increasingly moving towards larger ticket sizes. This means that this market is not being fully served. In 2019, I therefore proposed to the NIBC management to start serving this real estate finance market. Fortunately, I got support for this. In mid 2019, I wrote a business plan with fellow financier Lucas Luik to open up this mid-market segment. That autumn it was approved. In early 2020, we provided our first loan and OIMIO was a fact."
The creation of OIMIO happened just before the outbreak of the Corona pandemic in March 2020. Corona briefly delayed, but did not change the OIMIO course, assures Belt. 'Until the end of May, the market was at a standstill. However, the OIMIO shop did not close, nor did we increase our risk premium. The market picked up particularly strong as of September.
In 2020, we issued approximately 100 million euros worth of credit. The lion's share of our customers are experienced, professional parties who borrow an average of EUR 5 million. We also received many new applications in the first months of 2021. There is a huge amount of capital available and a healthy demand for underlying properties. As more easing and vaccination takes place, confidence and the number of real estate transactions will grow.'
In the same founding year, NIBC changed ownership. In December 2020, the American investor became the full owner of NIBC. Blackstone welcomes the entrepreneurial spirit of the OIMIO start-up, says Belt. 'Blackstone is just as entrepreneurial as NIBC and advocates a growth strategy. We see the enthusiasm for real estate financing and buy-to-let lending growing rapidly. The buy-to-let team started six years ago and has seen its loan portfolio grow to over EUR 860 million. With our new parent company, we have the wind in our backs to grow the loan book further.'
OIMIO is building a solid, well-diversified loan portfolio, says Lucas Luik, originally from NIBC's offshore team. We have a focus on offices and industrial space, but also provide credit for retail, residential construction, hotels, parking and primary care real estate. OIMIO does not limit its field of activity to the Randstad. Of course, most economic activity takes place in the Randstad, so most real estate transactions take place there. OIMIO however finances throughout the Netherlands, as long as our clients have experience in their region and their business model is sound. We have, for example, financed an office transformation in Kerkrade, as well as the purchase of an office in Maastricht, a housing project in Harderberg and a parking garage in Groningen.
As an entrepreneurial financier, OIMIO tries to respond optimally to the new demand, Belt explains. "We know that corona has a negative impact on the retail, hospitality and hotel market. OIMIO is certainly not looking for extra risk. So we are cautious in the high-street segment, where corona causes an accelerated conversion to online shopping. But the corona crisis also offers opportunities. Smart investors who are now buying retail property at a good discount with a good transformation plan are welcome to us. For example, we supported a developer in the purchase of a shopping centre in Duiven. The new owner is going to completely renovate this outdated complex from the 1980s. Entrepreneurs must of course bring their own money. OIMIO uses a loan-to-value ratio of 60 to 65 percent at the most.
OIMIO also continues to provide plenty of financing in the office market, adds Luik. It is likely that Corona and the resulting working from home will also change the office market. Companies will opt more for flexible office concepts. OIMIO believes in new, innovative office concepts. That is why we recently financed Flexizone. Flexizone now offers office and business space as well as storage space to creative companies at nine locations. Sustainability is also high on OIMIO's agenda. From 2023 onward, offices must have at least a C-label. OIMIO wants to be a partner for sustainable real estate investors. That is why we are helping an owner to expand his office in Amsterdam to achieve an energy A-label.
OIMIO's distinctive strength lies in the thoroughness and speed of its service, argues Belt. Real estate entrepreneurs receive an answer within a few days, whether it's a yes or a no. Foreign financiers often reject entrepreneurs last minute. Our due diligence, which we do with our partner OakNorth, is very efficient. Using big data solutions, we quickly come up with a thorough analysis. We also use simplified loan documentation. For a transaction under EUR 10 million, no lawyers are needed, which also promotes speed. Our indicative offer can therefore be at the notary's office within a month for funding.'
At OIMIO, therefore, people are at the centre and technology serves as support, Luik emphasizes. OIMIO does not do Excel financing. We want to meet and know our customers and understand his business. After all, real estate is about people. We also want to inspect the real estate ourselves. We use fintech at the back end. This allows us to automate many administrative actions. In this way, we create extra time to talk to the client and to think along with them.
Belt cannot say how big OIMIO will be in five to ten years' time. But OIMIO certainly has great ambitions for growth. We can continue to grow at least at the same pace. But it is not about size. OIMIO wants to add value for its customers. We want to become the preferred financier in the Netherlands in the mid-market segment. We are not worried about competition from other players. The total market for Dutch commercial real estate financing is estimated at 70 to 100 billion euros. So the market is big enough for us and other players.