Retail investment market picks up in the first half of 2014
The Dutch retail market experienced a strong investment growth in the first half of 2014, while the occupier market remained subdued.
This is the main conclusion from CBRE’s new Retail MarketView 2014 H1. Approximately 190,000 sq m of retail space were taken up in H1. This figure is higher than the volume of H1 2013, implying that the strong decline in take-up witnessed in 2013 has come to a halt. The largest transactions recorded in H1 were made by discounters, fashion chains (Primark, H&M, Zara) and supermarkets. In addition to the G4 cities, Maastricht and Groningen, the historic centre of Leiden also experienced a strong occupier demand.
An example is the new scheme Catharinasteeg, which found its main anchor in H&M. Several newcomers in the Netherlands sourced units in subprime “A2” locations in Amsterdam, such as Heiligeweg and Utrechtse Straat. Although these locations are showing a volatile occupancy picture, their vacant retail units are relatively quickly filled by foreign retailers who are attracted by the atmosphere of the streets, which is different from that of the mainstream “A1” high streets.
Over € 780 million was invested in retail property during H1, compared to only € 805 million for the entire year 2013. Several large transactions have boosted the investment volume, most importantly the sale of Corio’s shopping centre portfolio to a JV of Mount Kellett and Sectie5. The largest part of the investment volume was realized in Q1, and due to the long lead time of transactions, many of these deals were already initiated in 2013. The growth in investor demand in the Netherlands corresponds with the European picture, where investors in H1 focused on large portfolios and major shopping centers. Although the Netherlands is not seen as a core retail target yet, the arrival of a party as Mount Kellett shows that there is appetite from investors who - in anticipation of economic recovery and value growth – are searching for distressed and high yielding retail property.