'Top of market' called by leading Dutch investor

Bouwinvest, a €12.1 bn pension fund investor, says in its new market outlook report for the period 2020-2022 that it believes the Dutch market is at its peak – or fast approaching it – and that this high will last for three more years.

Fuelling the boom is a shortage of supply and sustained international capital flows into the country.

The office asset class has lost its crown to residential - around €6 bn of the firm's €12.1 bn portfolio is in housing - as the most popular destination for investor capital in the Netherlands. And the company predicts Dutch secondary cities will rise in prominence in response to market conditions, along with alternative segments such as healthcare, student housing and senior living.

Dick van Hal, CEO of Bouwinvest, said: ‘Initial yields and yield spreads are stabilising in this late stage of the cycle, and institutional investors, especially, are finding it increasingly difficult to generate the returns they need.

‘The long-term forecast for both residential and offices is that demand will remain stable and that is underpinning investment into these sectors. A select number of investors are, however, looking at higher-yielding alternative niche property segments such as healthcare, student housing and senior living, where there are attractive growth opportunities. As these niches mature, they are becoming more professionalised.

‘Our investment strategy for the Netherlands remains primarily focused on affordable housing in the Holland Metropole, or Randstad, area in the west of the country and we are actively looking for plots for new development or redevelopment opportunities.

‘For new residential product, we are also looking beyond the well-beaten investment paths in towns close to the large Dutch cities such as Zaanstad, Delft, Zoetermeer and Hoofddorp, where there is ample demand for housing and where it is possible to secure more attractive initial yields with new developments.’