The Dutch real estate market is showing a sustainable market balance. As the investment total for 2018 moves towards €20 billion, an investment volume of €17 to €18 billion is being predicted for 2019. This stabilisation is driven by a shortage of high-quality investment product.In combination with a positive growth forecast for the Dutch economy, investors are becoming more creative when it comes to selecting the type and location of the product.This is illustrated in the research report ‘Dutch Market in Minutes - The future of Dutch real estate: On track towards a new reality’.
Diversity across sectors and locations in Dutch real estate market
Striking is that investments are increasingly being made outside the Randstad; its share increasing from 36% in 2016 to 47% in 2018. This growth is accompanied by a decrease in investments in the G6* (-10%) and the Randstad (-1%) and is caused by the shortage of suitable supply. In addition, diversification has occurred in relation to the type of investment product. For example, in the past ten years the residential segment has almost doubled to a share of 33% in 2018. At the same time, the share of retail investments has fallen sharply from 40% to 11%. The office market remains stable and accounts for nearly a third of the total.
Additionally, the average transaction size in real estate has fallen with 6% in recent years. This is mainly because of a sharp decline in the number of portfolio transactions of substantial size. In the last two years a turnaround can be seen and the share of single asset deals is slowly starting to grow. This trend break is caused by a limited supply of larger-sized investment portfolios.
Jordy Kleemans, Head of Research & Consultancy at Savills: “The demand for good investment product is showing no sign of slowing down anytime soon. The Dutch economy’s forecasted sustainable growth and current rental growth are keeping the Dutch property market attractive to investors. In addition, real estate continues to be the ideal 'inflation hedge' and, based on current inflation expectations, this will remain the case in 2019.”
*G6 includes Schiphol and Eindhoven.