Netherlands real estate remains target for foreign investors

Photo: Selma90

Photo: Selma90

The Netherlands’ commercial real estate market remains a target for foreign investors, as the Dutch economy grows.

The Netherlands’ commercial real estate market remains a target for foreign investors. The Dutch economy grew 1.4 per cent in Q1 2016 across all key areas, from government investment and household consumption to exports.

The underlying economic strength is fuelling the country’s commercial property, with occupier demand rising in all sectors in 2015. 2016 has seen some variation in performance, with the industrial market enjoying strong take-up (up 34 per cent year-on-year to over 1.2 million sqm). Retail occupier demand held steady compared to last year, with demand reaching 200,000 sqm, but occupier activity is expected to increase, as bankrupt chains leave behind empty units ready to be filled.

The office market, on the other hand, saw “substantial” decline, according to Savills, down 17 per cent to around 280,000 sqm in 2016.

Even then, though, Savills expects this to be just a “temporary setback” as many occupiers actively searching for suitable space.

The retail investment market increased by 11 per cent to a total volume of €475m, fuelled by shopping centre transactions. In the course of
this year, gross prime yields decreased further to 3.75 per cent for high street retail and 5.25 per cent for shopping centres.

For the remainder of the year Savills forecasts investment volumes to remain high.

“While high-yield investors are losing interest as the market got too expensive, new investors entered and investor demand still far exceeds supply. The actual supply of attractive product might become a future bottle-neck,” notes the report.

“The economic growth and positive forecast will support occupier demand in all sectors. New developments (and redevelopments) for retail, offices and residential (including student housing) will mainly take place in the major Dutch cities as people, jobs and economic growth will continue to concentrate here.