Although we faced some exceptional events in the last month of 2015 and in the first half of this year, confidence is still strong in the Netherlands. We have seen economic growth as well as a steady increase in new jobs. So far, the influence of Brexit on the Dutch economy is not visible.
The positive sentiment in the residential market in 2015 even advanced in 2016. House sales is now on the same level as in the best pre-crisis years and is still increasing.
The number of new-build homes and units built in transformed industrial areas and office buildings stepped up since 2015. Yet, the demand grew a lot faster.
The shortage we noticed in the Amsterdam and Utrecht regions is spreading rapidly over the rest of the Netherlands. As a result sales prices have risen above the estimated level.
A debate is taking place on how to increase the number of building sites to fulfil the growing demand. So it is not hard to predict that house prices and home rental levels will keep on rising.
The residential rental market shows rising rent levels and very low vacancy rates. Not only in the very strong market regions.
Both Dutch and foreign institutional investors show a growing appetite for residential portfolios. We see a growth in the capital queue and an increase in new contracted housing stock acquisitions by these investors.
Commercial real estate sentiment continues to pick up. An increase in investments and shrinking vacancy rates in office space are visible. The volume of investment transactions this year is spectacular. Local authorities are still reluctant to build new office space. In some areas vacancy rates are still high. On a positive note, the conversion of a growing number of office buildings into apartments, student housing and hotels is in full swing.
On the one hand a few well known retail chains went bankrupt in 2015 and spring 2016. On the other hand, there is an increase in Dutch consumer spending. It is clear that the retail market is on the move and the retail landscape is changing rapidly. There is a growing demand in high streets and stronger regions, but at the same time there is a decrease in demand elsewhere. Ecommerce sales climb steadily, but the number of flagship fashion stores in high streets is also growing. The overall picture is fairly good. At least one of the bankrupt chains made a fresh start and overall sales are up.
The industrial market continues to perform strong. As said before, the overall picture of the Dutch economy is quite sound, both in export and in the internal market. So far, events like Brexit have not slowed down progress and in the logistic real estate Ecommerce has had a very positive influence on demand. There is a need for flexible and modern warehousing so demand in new-build or reconverted space is growing. Due to this all the market shows a large transaction volume on the investor side.
2016 is by no means a boring year. We are looking forward to discuss opportunities with you!
Chairman of the board of Holland Proparty Plaza, CEO of Amvest