Savills expects more forced sales in Dutch market

Softening yields in the Dutch office market have turned the Netherlands into an opportunity driven market for the first time in more than a decade, according to real estate advisor Savills. In the past few months, yields have already softened by 30-50 basis points and further easing is expected.

The Dutch market is ripe for investors with a more value-added or even opportunistic approach, said Jeroen Jansen, head of research at Savills in the Netherlands. '2012 is also likely to show an increase of forced sales. The limited liquidity will, however, narrow demand for these opportunities, resulting in sharp price corrections for specific asset classes.'

The proposed sale of the Philips High Tech Campus for EUR 450 mln in Q1 2012 to private investor Chalet Group is the largest commercial transaction for many years and indicates that this type of investor has potential to increase market share in 2012, he added. Forced sales are also on the rise. Earlier this week, private equity groups TPG Capital and Patron Capital Partners acquired the Opera Finance (Uni-Invest) CMBS for EUR 359 mln, marking a 40% discount on the last valuation carried out in April 2011. The facility was secured on secondary office and logistics assets with high vacancy levels.

Savills expects investors to focus increasingly on retail and industrial assets this year, as well as alternative sectors such as student housing, hotels and parking garages. However, the firm does not expect overall 2012 investment volumes to exceed the 2011 total of EUR 3.4 bn due to a challenging market with limited financing opportunities. This will result in further upward pressure on yields and an opportunity driven market with sufficient purchasing possibilities for investors with access to capital.