According to Savills latest ‘Market in Minutes – the Netherlands, Q4 2019’, the Dutch real estate market has had a record breaking decade. Highlights over a ten-year period include:
- Influx of foreign capital has almost doubled from 26% in 2010 to 47% in 2019 YTD
- Logistics take-up has increased by 127%
- Utrecht CBD has seen rental growth of 48%
- Student housing and healthcare investment have increased by 1000%
Jan de Quay, Managing Director at Savills in the Netherlands, says: “Investors have shown their willingness to broaden their scope with regards to diversification to new sectors and spread across to the regions. As a result, the Dutch real estate market is in a much stronger position than 10 years ago. The key changes in the occupier and investment market show remarkable growth whether in terms of rents, investment volumes or liquidity across the most important real estate asset. Remarkably, increasing international uncertainty has not resulted in a slow-down of the Dutch real estate market. In addition, from an economic perspective, all key indicators are still showing ‘green’. Therefore, we expect an above-average investment volume of between €17 and €18 billion for 2020.”
Factors impacting the Dutch real estate market on the brink of a new decade
According to Savills, lack of supply, more liquidity and low interest rates are and will continue to be important drivers of Dutch real estate. In addition to these factors, the Dutch real estate market is facing the consequences of recent environmental and spatial planning legislation: the nitrogen issue. The latter is seen predominantly as a threat to the Dutch real estate market, because it means that investment in new-build markets will decline. Currently, the Dutch government is investigating ways to tackle the issue of nitrogen pollution and resolve this issue for the future.
Jordy Kleemans, Head of Research & Consultancy at Savills in the Netherlands, explains: “The nitrogen issue is putting more pressure on the availability of Dutch real estate at a time when the market is already tight. The timing of this uncertainty and cancellation in relation to several new-build projects is unfortunate, since supply will not be able to meet rising demand going forward. In general, such conditions push up the value of real estate, resulting in rental growth. These two developments are leading to increased interest from investors.”