Property investment volume H1 2017 to exceed H1 of record year 2016
In the first half of 2017, CBRE recorded Dutch commercial real estate transactions totalling almost €6.2 billion. This volume is 11% higher than it was in the same period last year. Despite the fact that the first quarter was characterised by insecurity surrounding the elections, the demand for Dutch real estate remained high.
Investors are increasingly looking for investment opportunities to profit from rental growth. The Netherlands is one of the countries in Europe that shows the greatest rental growth in the office market, traditionally the largest segment in the investment market. Limited construction activity – also from a European perspective – gives investors confidence that scarcity in the office market is still on the rise and that further rental growth can be expected.
From CBRE’s report The Property Perspective: Capital Markets, it can also be concluded that the investors are increasingly shifting their focus to new market segments. One example of this is the small-scale commercial space (also known as light industrial), a type of real estate traditionally characterised by fragmented ownership and small-scale users. Investors driven by structural changes in the market, such as the growing importance of e-commerce and last-mile deliveries, are looking at this as a growth market.
Other sectors in which international real estate advisors have noticed a large amount of investment activity are retail – despite continuing tensions in the retail landscape – and hotels. Overnight stays for both the tourism and the business sector show a strong growth due to an increase in consumer spending and operating results. The hotel market is attracting interest from large international investors.
We see that tentative interest is being shown in objects in areas that only 6-18 months ago showed relatively little investment activity. Capital is moving towards the regional cities and secondary locations in the Randstad area, driven by a growing economy, a shortage of high-quality real estate and spillover effects from scarcity in the Amsterdam office market. As described in CBRE’s Outlook 2017, we expect 2017 to be a strong real estate investment year that is likely to show the same top results as 2016.
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