Dutch market ‘at a turning point’ as investors cherry pick

The Dutch real estate market is recovering from the lows of 2023 and there is a lot happening under the surface, delegates heard at Real Asset Media’s Netherlands Investment Outlook briefing, which took place yesterday in Amsterdam and was hosted by CMS at their offices.

“Last year was difficult, but now we’re seeing a normalisation of the market,” said Peter Helfrich, managing director, Primevest Capital Partners. “We are at the bottom, or very close, so people are preparing for a new cycle. But it will take time for insurance companies and other institutional investors to dip their toes in the water again.”

It is a time of transition in the Dutch market, as some investors are still in wait-and-see mode and prefer being cautious until interest rates go down significantly.

“Big institutions are still sorting out the loss cycle, so they are not quite ready to take a positive view and be active,” said Helfrich. “We need to see more capital pouring back into the Dutch market.”

Other investors, however, especially the ones with ready cash at their disposal, are making the most of the lack of competition in the market and finding opportunities.

“The market is picking up slowly, but there are still big question marks over interest rates and financing costs,” said Rogier Bos, real estate finance Benelux, Berlin Hyp. “We’re seeing family offices and private investors stepping in where big institutions are not active.”

The data that point to a slowdown in transactions can be misleading, because in this transition phase many deals are taking place off market.

“There’s a lot happening just below the surface, under water,” said Jan van den Hogen, head of tenant relationship management for Logistics, Deka Immobilien. “Developers are testing the water by bringing assets directly to investors, and off market is the first port of call. This way, there are still a lot of transactions actually being done.”

Investors with available equity have the luxury of choice and can pick out the best deals available in top locations, while their competitors have been halted by high financing costs.

“I do not mind high interest rates, because they have given us a lot of opportunities to cherry pick,” said van den Hogen.

“I am positive about the outlook for the Dutch market and believe volumes will be picking up,” said Hilke Nijmeijer, senior portfolio manager, CBRE European residential strategy. “We’re seeing the first signs of investors coming back to the market as yields improve. We are at a turning point.”