Dutch retail has proved it’s more resilient than most
The Dutch retail sector has been more resilient than others and offers considerable opportunities, delegates heard at Real Asset Media´s Netherlands Investment Briefing, which took place online on the REALX.Global platform recently.
“We like retail and we think that now it’s the time to invest because of all the negativity there has been around the sector,” said Tia van Beek, director transactions, the Netherlands, Principal Real Estate Europe. “We like to go shopping and we really missed it during lockdown. Online is here to stay, of course, but a balance will be struck.”
Investors have to be selective on the location, preferably in the city centre, and on the type of asset, she said, but the sector has proved it is resilient and can deliver strong results.
Retail has had a bad press, and that had a negative impact on prices which investors can now take advantage of.
“Retail is extremely well priced now and that is the opportunity,” said Peter Helfrich, managing partner, Primevest Capital Partners. “The sector is in a transition phase which will take a while to play out. In city centres rents are still far too high, especially in Amsterdam, so they will have to normalise. But on the whole I am positive on retail.”
The question of rents has to be solved, especially as mixed-use hubs become more popular.
“Attractive retail has to be blended with resi and leisure, but I’m not sure that a coffee shop can afford the same rent as a shop,” said Rogier Bos, real estate finance Benelux, Berlin Hyp. “It is a very interesting time of change and evolution for the sector. Investors will come in looking for upward potential. Some shopping centres will be rebranded, some retail will be turned into resi.”
Convenience retail stable and predictable
Retail is an extremely diverse asset class and some sub-sectors have done better than others.
“We’ve financed mainly convenience retail and supermarkets and that has worked very well,” said Bos. “But in general in the Netherlands people like going shopping, including the young. Even during lockdown, people went to city centres to go window-shopping.”
Convenience retail tends to be a good income play because it is a stable and predictable market, especially in residential areas.
“Convenience retail combined with leisure is a real growth opportunity,” said van Beek, because it ticks several boxes, especially if it is in residential areas that are well-served by public transport.
“We’re very pleased with our convenience retail portfolio and we’ve never had a problem with rent collection because tenants tend to be strong,” said Jaap van der Bijl, CEO, Altera Vastgoed NV. “It is also easier to intervene to improve the ESG component, for example installing solar panels on the roof.”
