ALL-TIME RECORD YEAR FOR DUTCH REAL ESTATE INVESTMENTS
Investment volume increases 18% y-o-y to € 13.5 billion
In 2016, a total of more than € 13.5 billion has been invested in Dutch commercial real estate, according to figures from international real estate advisor CBRE. This is an absolute record and an increase compared to 2007, the previous record when an investment volume of € 13.15 billion was noted.
In the first three-quarters of 2016 more than € 7.8 billion was invested in Dutch commercial real estate. In the last and final quarter, an additional € 5.7 billion was invested. Investors were particularly interested in offices (€ 5.8 billion) and residential real estate (€ 3.3 billion). The investment volume in industrial properties remained stable at € 1.2 billion and the invested volume in retail was lower than in 2015 (€ 1.8 billion) when the Corio / Klépierre portfolio was purchased by Wereldhave for € 730 million. In addition, this lower volume can be explained by uncertainty in the retail market by bankruptcies of large domestic retail chains end of 2015 and early 2016.
Investors are often risk-averse. Investing in a country with sound economic fundamentals and relatively high yields perfectly fits this profile. We see that investors broaden their horizon caused by a scarcity of prime product. In their search for yields they look beyond Amsterdam at cities such as Rotterdam and Utrecht. We also see increasing appetite for alternatives – in particular healthcare.
Both large portfolios and single assets traded in 2016. For 2017 we again expect high volumes, partly driven by investments in the retail market. Despite the challenges that still lie ahead, we see a number of positive signals that offer opportunities for investors. Consumer confidence hasn't been this high in the last 9 years and we think that major headwinds in terms of bankruptcies belong to the past. This, together with the fact that retail properties are relatively favourably priced, promises a good year for the retail market in 2017.
CBRE Nederland will release their Outlook 2017 report on January 19th focusing on their expectations for the Dutch CRE market for the year ahead.