Amsterdam,
08
October
2018
|
18:57
Europe/Amsterdam

Investors invest record amount in Dutch rental housing sector

By the third quarter of 2018, a new record was reached for investments in Dutch rental housing: the invested €4.5 billion is €700 million higher than in the entire record year of 2017. The investment volume was boosted by large portfolio transactions of existing buildings as well as the purchase of individual new construction projects.

Highest housing investments outside of Randstad area 

For both existing housing and new construction projects, investors are shifting their focus to include new building projects outside of the Randstad conurbation. 60% of the investments in existing homes took place outside the G4, compared with 30% in recent years. New construction investments outside the G4 also rose to 40% in the first three quarters, compared with 30% in the 2014-2017 period.

More investments in housing than in offices

It is striking that the investment volume in homes exceeds that of offices. Traditionally, the office market is the real estate segment with the most investments. In the first nine months of 2018, €100 million more was invested in housing than in offices. According to CBRE, it is quite possible that, throughout 2018, the most significant investments will also be made in residential real estate. The value of the available homes likely to be sold in 2018 is approximately €1-1.5 billion higher than the available office buildings.

Bart Verhelst, Executive Director Capital Markets, CBRE
This shift is primarily due to the current offer. After six consecutive years of growing investments, most prime office locations have already changed hands. In addition, the office market, where there is the greatest demand, has little new construction to offer due to Amsterdam’s restrictive policy for new office construction. Developers also have a preference for residential construction due to the significant increase in rents and purchase prices.
Bart Verhelst, Executive Director Capital Markets, CBRE
Alexander Buijs, Director Residential Investment Properties, CBRE
The trend we are currently seeing is that out of all segments, the greatest share of investments is going into residential real estate. We believe this trend may continue in 2019. Many more residential portfolios are expected to become available for sale and both local and international investors are excited about the prospects on the Dutch residential investment market, due to the structural scarcity. The investment volume may be reduced due to delays or postponement of new construction projects as a result of poor planning capacity, a more restrictive policy in major cities and surging construction costs.
Alexander Buijs, Director Residential Investment Properties, CBRE

Expected total investment volume 2018

At €13.6 million (in Q1-Q3 2018), the current total investment volume in commercial real estate is €1,5 billion higher than it was in the same period last year. However, an exceptional number of transactions were concluded in Q4 of 2017, valued at €7.6 billion. In Q4, CBRE expects an investment volume of €5-6 billion. This would bring the total 2018 investment volume to €18.5-19.5 billion. This is historically a very high level, but slightly lower than in the 2017 record year.

Read more here about the CBRE report on the impact of the Municipal Executive’s plans for the Amsterdam housing market.

Investment volume in the Netherlands, per quarter, per real estate segment (x million euros)

 

 

 

 

 

 

 

 

 

 

 

Investment volume in the Netherlands, per quarter, per real estate segment (x million euros)
Note: 2018 here only includes Q1 through Q3

 

 

 

 

 

 

 

 

 

 

 

About CBRE

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers from more than 450 offices (excluding affiliates) worldwide. CBRE offers strategic advice and guidance in property sales and leasing; corporate services; property, facilities and project management; appraisal and valuation; development services; investment management; and research and consulting. Please visit our websites at www.cbre.nl and www.cbre.com.