OUTLOOK NETHERLANDS Dutch investment volumes head for €11b mark

Strong trading activity will push Dutch real estate investment volumes towards the €11 bn mark this year after topping €10 bn in 2014, itself a post-crisis peak, according to CBRE estimates which are supported by PropertyEU research data.

Foreign investors accounted for two-thirds of investments in the Netherlands last year, with US and German players taking the lead. US capital captured 26% of the total volume compared with 14% for German investors, traditionally the biggest investor group in the Netherlands.

An emerging trend this year is that US private equity firms like Blackstone and Lone Star, which dominated trading activity in 2014, are beginning to exit assets and portfolios which they bought three to four years ago, said Erik Langens, executive director of capital markets at CBRE in the Netherlands.

Speaking at PropertyEU's Netherlands Outlook Briefing in Amsterdam earlier this month, he said selling by private equity firms will be a key source of product and transaction activity in the coming years, along with assets tied to loans held by ‘bad bank’ Propertize which currently add up to some €4.8 bn.

The Dutch government recently launched a sales process for Propertize, which was formed from the nationalisation of SNS Reaal’s property finance division in 2014.

Market in transition
Langens said trading activity is now shifting from private equity to core and value-add capital which has been absent for a number of years. ‘The Dutch market is fully in transition in terms of capital sources,’ he said. ‘The market in the last few years was fully dominated by private equity money. That capital is still extremely active but at the same time we’re seeing it selling portfolios and individual assets to core and value-add investors who haven’t been in the market for a long time.’

A case in point, he said, is listed Dutch firm NSI, which recently bought an office portfolio from a joint venture between Goldman Sachs and developer OVG for €143 mln.

Asian institutional money has also been active this year: in November, Singapore-listed First Sponsor expanded its real estate holdings in the Netherlands by leading the €226 mln consortium acquisition of offices from Dutch insurer Delta Lloyd.

Underscoring the keen foreign investor interest in Dutch real estate, Langens noted that First Sponsor won out over 9-10 competing private equity bidders. ‘So what we’re seeing is different sources of capital targeting the same portfolios and assets,’ he said. ‘All types of capital are active at the moment and that is new in the Dutch market.’

Watch CBRE's Erik Langens outline the key features of the real estate investment market in the Netherlands