Expo Real: Dutch retail to deliver "solid returns", capital appreciation

Selective investment in Dutch retail properties will generate solid income returns and capital appreciation for investors, according to a study commissioned by the Association of Institutional Property Investors in The Netherlands (IVBN).

Speaking at Expo Real in Munich, Ecorys managing consultant Wilbert Kroesen, who compiled the report, said: “Now is the right moment for investors to take a good look at the Dutch retail property market.

“Steady growth in the economy and consumer confidence, burgeoning populations in the big cities and restrictions on new supply suggest the Dutch market will offer stable risk-adjusted returns over the next five years.”

The ‘Investment in retail property in the Netherlands: A European perspective’ report was commissioned by domestic investment managers including Altera Vastgoed, a.s.r. Real Estate Investment Management and CBRE Global Investors.

Bouwfonds Investment Management, Bouwinvest, DELA Vastgoed, Syntrus Achmea Real Estate & Finance and Wereldhave were also involved in the commissioning.

The outlook for the Netherlands, according to the report, is comparable to neighbouring Germany.

Of the seven main European markets studied by the researchers, only retail real estate in Germany and the Netherlands avoided negative nominal total returns in each of the past 15 years.

The other markets examined were France, Norway, Sweden, Spain and the UK.

Kroesen said construction of new Dutch retail properties had fallen dramatically since the global financial crisis.

The strong legal protection enjoyed by retail tenants is under review, and government support will be only for the strongest parts of the retail market.

“That indicates,” Kroesen said, “that we could see shortages in retail real estate in the Netherlands over the next decade, which would underpin pricing in the investment market.”

The report found a widening polarisation in performance, with top store locations in main cities and local convenience shopping centres contrasting with the lagging returns of secondary shopping destinations.

It also highlights prime high streets of the largest cities in the central Holland Metropole region, core locations in the next ranking urban areas and local convenience shopping centres across the country.