Savills forecasts that investment turnover in the Netherlands commercial property market will reach between €3.5 billion and €4 billion in 2014, against €3.4 billion in 2013.
Savills forecasts that investment turnover in the Netherlands commercial property market will reach between €3.5 billion and €4 billion in 2014, against €3.4 billion in 2013. The firm’s latest Market in Minutes suggests this volume will be boosted by the retail sector. In the first months of 2014 over €600 million has been transacted in the retail investment market, almost exceeding the 2013 full year total for the sector of €615 million. This has been achieved through four significant individual deals in the segment combined with the sale of a €213 million retail portfolio by Corio to a joint venture of Mount Kellett and Sectie5.
According to the international real estate advisor’s latest research the €3.4 billion overall investment turnover in the Netherlands in 2013 represents a 27% rise year-on-year. Of this €1.3 billion was transacted in the final quarter as appetite for Dutch property increased. The firm notes that driving forces behind this growth are the general increase of capital flowing towards property markets, competitive pricing of Dutch properties both for prime and value-add/opportunistic buildings, and the growing willingness of owners to dispose of non-performing assets.
Clive Pritchard, head of Savills in the Netherlands, says: “Interest in Dutch real estate has significantly increased over the past 12 months, both from overseas and domestic buyers. The prime office investment market in Amsterdam was particularly strong in 2013, however as available supply diminishes, we expect buyers to turn increasingly towards prime assets in the other major cities and non-core offices in the capital.”
In terms of sectors, in 2013 the office market accounted for €1.9 billion (56%) of transactions dominating market share, followed by €880 million industrial investments according to Savills. Going forward the office and industrial markets are expected to remain stable, whilst retail investments have already almost surpassed 2013 levels. According to the report, yields for prime Dutch properties, which currently stand at 6.0% for prime offices, 4.25% for retail and 7.25% for prime industrial assets, are likely to contract further. In addition, increasing investor interest in value-add and opportunistic properties will prevent further softening of secondary yields.
In the occupier market, Savills records total overall take-up across the office, retail and industrial sectors in 2013 at 4 million sq m, in line with the previous year. Broken down the firm notes that retail demand rose to 370,000 sq m in 2013, up from 280,000 sq m in 2012, driven by expanding international fashion retailers, often in large inner-city developments. Industrial demand grew slightly by 2.6% to 2.47 million sq m in 2013, according to the report, and Savills believes demand in this sector will remain stable in 2014. On the other hand demand for office space decreased to 1.15 million sq m, from 1.30 million in 2012 with the majority of lettings located the Randstad (an area comprising the top four cities of Amsterdam, Rotterdam, The Hague and Utrecht).
Jeroen Jansen, head of research at Savills in the Netherlands, comments: “In 2014 so far activity in the office sector supports an ongoing trend towards consolidations, more efficient use of office space and purchasing instead of leasing.”