A sea of available capital

Although the range of core investment product (the main focus of investors at the moment) is limited, there is a lot of capital available.

This is partly due to the ECB’s buy-back programme, for which an additional injection of 500 billion was announced last year. The ECB is also keeping the interest rate at the same level to help boost the economy during the COVID crisis.

Real estate funds have also made more capital available for investment. The total available capital from the new funds was €315 billion at the beginning of 2021, compared to €281 billion at the beginning of 2020 (+12%). This is not including the increasing number of investing households and the associated available capital. Dutch households currently have limited spending options and investors are faced with a comparable challenge. The investment options that meet the requirements of investors are limited and as such they are struggling to find suitable destinations for the available capital. This has resulted in a decline in the total investment volume in the first few months of 2021.

"Dutch households currently have limited spending options and investors are faced with a comparable challenge."

Outlook

Calm before the storm

As the winners of the COVID-19 crisis are revealed, current demand for investments in the Dutch real estate market is mainly focused on logistics, residential investments and food retail. The risks for office buildings and shops are still hard to assess, particularly for secondary locations. Uncertainty about the future of offices and inner-city shopping areas means investors will remain cautious until the permanent effects of this crisis become clearer. As a result, investors will gradually start daring to enter sectors again, such as the hotel and catering industry, retail and secondary offices. These markets are currently ignored because of the uncertainty about the long-term consequences after Covid-19. As the vaccination programme progresses, and travel restrictions are lifted, it will become easier for (foreign) investors to assess the risks of such investments.

It needs to be said however, that for (sub)sectors where COVID-19 has caused lasting economic damage, such as certain parts of the retail market, investors will remain reluctant to invest. In the long term, this means that the difference between core and other asset classes will widen.

"Uncertainty about the future of offices and inner-city shopping areas means investors will remain cautious until the permanent effects of this crisis become clearer."

Driven by the available capital, the expectation is that the investment volume in the broad sense will pick up again, due to an increasing demand for investments. Since it will take at least until the summer before a large part of the Netherlands is vaccinated, a very dynamic Q3 and Q4 is expected, in which records may be broken.


Savills World Research We provide bespoke services for landowners, developers, occupiers and investors across the lifecycle of residential, commercial or mixed-use projects. We add value by providing our clients with research-backed advice and consultancy through our market-leading global research team



Clive Pritchard

Head of Country

+31 20 301 2031

c.pritchard@savills.nl


Ellen Waals

Head of Agency

+31 20 301 2040

ellen.waals@savills.nl


Bas Wilberts

Head of Residential & Hotel Investment

+31 6 55 47 49 60

b.wilberts@savills.nl


Reinier Wegman

Director Investments

+31 6 513 11 518

r.wegman@savills.nl


Martijn Onderstal

Head of Valuation

+31 6 15 09 03 63

martijn.onderstal@savills.nl


Jordy Kleemans

Head of Research & Consultancy

+31 6 11 08 36 54

jordy.kleemans@savills.nl


Savills plc: Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK, continental Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. This report is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.


Alle inhoud © copyright 2021 Savills. Alle rechten zijn voorbehouden. Savills Nederland Holding B.V., opgericht en geregistreerd in Nederland. Gevestigd: Claude Debussylaan 48, 1082MD Amsterdam. KvK nummer: 33202244.