2021H1 shows limited recovery compared to occupier market and the wider economy
2021H1 was a relatively quiet period for the investment market (€4.7 billion) compared to 2020H1 (€9.1 billion), a decline of 48%. That said, investment volume did grow 29% in 2021Q2 compared to 2021Q1, and 2021Q3 has started promisingly.
As in the occupier market, logistics was also the main driver in the investment market. Logistics investment volume grew 49% in 2021H1 compared to 2020H1, with logistics accounting for over 50% of total investment volume. An increasing number of investors are seeking to take advantage of this growing market by focusing on logistics portfolios and urban logistics. The Amsterdam Logistic Cityhub, for example, was recently sold to CTP for €307 million: the Netherlands’ largest single asset transaction in logistics real estate to date. The fundamentals for residential as an investment category remain unchanged. Even so, the investment volume of residential properties fell 71% in 2021H1 compared to 2020H1. This decline was mainly due to a rise in transfer tax, which went up from 2% to 8% on 1 January and prompted institutional investors to shift their focus from existing buildings to new builds. However, the lack of new builds means that fewer transactions can take place, despite there being no shortage of available capital. As a result, the number of residential investments will show signs of continued recovery in the coming period.
In the other investment sectors, some sub-sectors performed very well, others less so. In the retail market, the main focus was on supermarkets, based on stability of turnover. In the office market, meanwhile, investors have been demonstrating a notable interest in alternative properties. In recent months, this has generated transactions in the life sciences and science parks sector. Eindhoven High Tech Campus, for instance, recently changed hands for €1.1 billion. This location, a hub for large tech companies including Philips, NXP, Intel, ASML and IBM, was sold to Oaktree Capital Management. These recent transactions represent an investment volume of €6.2 billion 2021YTD, with the recovery seen in 2021Q2 likely to continue for the remainder of 2021.
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