Secondary assets rather than the 'expensive' prime end of the Dutch real estate market offer some of the best returns, according to Michael Walton, CEO of Rynda Property Investors.
Secondary assets rather than the 'expensive' prime end of the Dutch real estate market offer some of the best returns, according to Michael Walton, CEO of Rynda Property Investors.
'Our overall assessment is that the prime markets in the Netherlands are too expensive. We see a lot of international capital has come in, and the resulting yield shifts in those prime areas has been very rapid. Therefore, we are focusing on the secondary market where that yield shift has not yet taken place,' Walton said.
Rynda's boss was commenting during PropertyEU's latest Netherlands Investment Briefing hosted by CBRE Global Investors in London on 21 May.
The briefing heard that far too much was built in he Netherlands during the boom years and that many markets are still in crisis as a consequence. The prime end of the market, in contrast, has seen a strong recovery in terms of investment, typified by equity-rich German fund managers expanding their holdings in the Zuidas, Amsterdam's premium office sub-market.
Making the case for the secondary market, Walton cautioned that a good analysis was vital. 'You've got to really make sure that you get the locations, tenants and buildings right. Bearing in mind the huge amount of over-supply in certain markets you've got to be incredibly specific in the way you underwrite the assets you are going to work with.'
'If you take a medium-to-long term strategy that's where we perceive you will get a large income return with perhaps some capital appreciation towards the latter end of your investment strategy,' Walton added.
Click on the link for this and other interviews from the Netherlands Investment Briefing