Given the low interest rate environment and the yield spread offered by real estate, investors’ capital inflow into real estate markets remained strong last year. This resulted in a total investment volume of € 18.5 billion, very much driven by the large appetite from international investors. While this was the third highest volume ever recorded in the Netherlands, it did remain 12% behind last year’s total.
We expect investors’ appetite to remain high for real estate investments, due to the fact that real estate continues to prove its value in terms of adding diversification to investment portfolios and the total returns it offers compared to interest rates and other asset classes.
The Dutch retail investment market accounted for 12% of the total investment volume and saw € 2.3 billion in investments in 2019, compared to € 2.6 billion in the previous year. More investors are cautious, as they are uncertain about the outlook for the retail market. The forecast growth of online is likely to play an important role in this cautious approach. Within the sub-segments, only high street retail and shopping centres registered higher investment volumes.
Investor key factors | 2018 | 2019 | 2020 forecast |
|---|
Prime net initial yields (excl. purchase costs, year-end) | 2.65% | 2.65% | → |
Investment volumes (€ bln) | € 2.6 | € 2.3 | → |
Sources: JLL, Bouwinvest Research & Strategic Advisory