Residential has been one of the standout sectors in the Netherlands’ real estate markets over the last year, but it is by no means the only sector in demand, as AEW associate director research and strategy Dennis Schoenmaker points out.
The Dutch market saw €7 billion to €8 billion invested in the residential market in 2020. “It comes back to supply/demand imbalances,” he told Real Asset Insight’s Richard Betts. “There’s a massive shortage of housing which has driven house prices up significantly, despite the pandemic.”
The industrial property sector is in a similar position. “There’s been a lot of demand for last-mile logistics, for light industrial etc, so demand is still robust and the supply is pretty constrained.”
And he said there is as yet no sign of oversupply. The same applies to the office sector although the effects of the working-from-home phenomenon still need to be unravelled.
“Probably we will see that once the pandemic is over. But for now, if we just look at the supply side, it is very constrained in the Netherlands, a completely different story than after the GFC when vacancy levels were very high,” Schoenmaker said.
He added that the Netherlands has done well in reducing structural vacancy by conversion to other uses, predominantly residential. Other sectors are making headway though and he includes mixed-use property and life sciences. “The life-science sector is a very attractive one in the current environment.”
Click on the video above to watch the full interview or listen to the podcast below.