Record year expected for real estate investments
Housing the largest investment sector for the first time
2018 is set to be another record year for investments in the Netherlands, says international real estate advisor CBRE. Based on the current figures and the upcoming transactions up to the end of the year, CBRE expects the total investment volume to be between €20 and €21 billion. An increase of 4% compared to the 2017 record year. For the first time ever, the largest investments were made in housing and not in the sector traditionally in the lead: office buildings.
Growth of investments in housing
As expected, the total investment volume in housing is expected to amount to almost €7 billion compared to €3.8 billion in 2017. The growth in housing investments was partly driven by the sale of several large-scale residential portfolios. Examples include the sale of a residential portfolio by Nationale-Nederlanden to Vesteda (€1.5 billion) and the sale of 1400 homes by Orange Capital Partners to CBRE GI (€425 million).
Growing interest in new developments
Particularly striking is the growth in investments in new construction projects. Over 25% of the available total investment volume in 2018 consisted of new builds. Housing is traditionally the largest asset class, but the number of new-build investments is also increasing in the logistics sector. Due to growth in user markets there is room for new builds and this offers opportunities for investors.
Most investments outside the Randstad
Investors are increasingly looking at areas outside of the Randstad conurbation. This year, 24% of the overall volume was invested in Amsterdam, compared to 32% in 2017. The share of investments outside the Randstad was 44%, compared to 27% last year.
Due to an unexpectedly strong second half of the year, 2018 still achieved record-high real estate investments, contrary to previous expectations. This shows that despite the slower growing economy, the confidence of real estate investors is unchanged.
The strong growth in residential investments is caused by the current favourable investment climate, in which consumer market demand is structurally higher than supply. In addition, the scarcity of offices ensures that investors are looking at other segments. CBRE expects that this trend will continue in 2019.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.