The Netherlands faces a new financial crisis due to a structural oversupply in the commercial property sector, the Dutch central bank warned last week. Valuations must be quickly marked down to kick the sector back to life, the bank´s regulatory chief Jan Sijbrand said in an interview in the country's leading financial daily Het Financieele Dagblad.
The Netherlands faces a new financial crisis due to a structural oversupply in the commercial property sector, the Dutch central bank warned last week. Valuations must be quickly marked down to kick the sector back to life, the bank´s regulatory chief Jan Sijbrand said in an interview in the country's leading financial daily Het Financieele Dagblad.
The Dutch property sector is currently grappling with rising vacancy rates and falling rents, coupled with a huge refinancing burden. And demand for offices and retail is set to continue to decline due to new ways of working and internet shopping, Sijbrand told the paper. 'As long as there are doubts about real values there will be no confidence in the market and financiers and investors will not budge,' Sijbrand said.
Dutch property fund Uni-Invest has so far failed to sell its office property portfolio despite offering a 40% discount. The EUR865 mln office portfolio is facing a forced sale after the collapse last June of refinancing talks between Eurohypo and the bondholders of the Opera Finance CMBS facility underpinning the assets.
One idea the Dutch central bank is considering is to put distressed property portfolios into a 'bad bank' owned by the government. However, Sijbrand said he doubted taxpayers would support this option.
Last year, the financial services authority AFM warned investors to be careful about putting money into non-listed property funds as a number are under investigation for providing misleading information. The Dutch central bank has warned that the property market will be subjected to tighter supervision in the coming year.
