The Netherlands was one of the best performing European investment markets in 2017 with a record investment volume of more than € 19.5 billion. And with a strongly performing economy and expanding occupier markets, the prospects for 2018 are sound. Investors’ risk appetite will increase in the year to come, putting more unconventional locations and investment classes more firmly on the radar.
In 2017, 70% of all purchases were made by foreign investors and 30% of all transactions were between foreign investors. This illustrates how Dutch real estate is now being traded in a global marketplace, by international players.
An analysis of the previous cyclical upturn (2005-2007) and the last three years of the current upturn (2015-2017) shows a strong internalisation of ownership. The previous upturn was characterised by a wave of German funds that became quite dominant in the office market, buying many (mainly secondary) properties at relatively high prices. And whereas Dutch investors were dominant in the previous upturn, they have become a minority in the current one.
The extent of internationalisation varies greatly between asset classes. Dutch office and logistical assets were already popular among foreign investors in the previous upturn, representing approximately half of investment volume, but during the current upturn, this share has increased to 71% and 78%, respectively. By contrast, residential and retail properties were bought almost exclusively by Dutch investors during the previous upturn. But here again, foreign activity has now increased – to 29% and 59% respectively.
Investment outlook per sector
Learn more about the developments in the different sectors
Increasing business activity and a tightening labour market in 2017 have fuelled activity on the office occupier market in the Netherlands. Businesses saw demand for their products and services increase, recruited new personnel and acquired or leased new office space to support the growth. Growing occupier demand will result in rapidly declining vacancy rates in 2018, but limited development potential is putting rents under upward pressure. Want to learn more? Download the 2018 Real Estate Market Outlook report.
In 2017, € 3.8 billion has been invested in the retail market. Mostly international retailers have expanded their store networks, with this the vacancy rates in prime high streets dropped and are expected to continue to decline in 2018. The most popular cities may well even see their central shopping areas expand in 2018. Want to learn more? Download the 2018 Real Estate Market Outlook report.
E-commerce, in particular, is a demand accelerator for logistics as the handling of a product ordered online can require up to three times more space as a conventional sale. Nonetheless, traditional retail sales remain the cornerstone of logistics market performance. In this regard, 2018 looks very promising as continuing economic growth will translate into a 2% increase in consumer spending. Want to learn more? Download the 2018 Real Estate Market Outlook report.
With abundant international capital searching for investment opportunities in a low interest rate environment, all kinds of ‘new’ asset classes have been identified in European real estate markets. In this regard, within a short period of time the Netherlands has become one of the most mature residential investment markets in Europe. As one of those mature residential investment markets, The Netherlands will continue to be attracting foreign investors in 2018. Want to learn more? Download the 2018 Real Estate Market Outlook report.
With a significant part of Amsterdam’s hotel stock currently owned by investors with a long-term perspective, 2018-2020 should also see strong interest in new projects. New developments in Amsterdam will add approximately 7,000 rooms to the current stock, probably stabilising the strongly increased occupancy level, particularly in secondary locations. Nevertheless, a shortage of investment product in prime locations will continue to prompt investors to seek opportunities beyond Amsterdam. Want to learn more? Download the 2018 Real Estate Market Outlook report.
Healthcare real estate develops into a preferred investment as the population aged 65 years old and above is expected to rise from 2.1 million people in 2017 to 2.8 million in 2030. In 2018 another record investment volume is expected. Want to learn more? Download the 2018 Real Estate Market Outlook report.