Commercial property markets expected to remain stable in Holland
|Wednesday, 05 September 2012|
German funds are snapping up Dutch commercial properties, accounting for 47% of office investments in the first half of 2012, as the country’s markets experience a favourable outlook
According to Savills latest research report on the Netherlands commercial real estate markets the first half of 2012 saw a total office investment volume of €1.1 billion, a rise of 36% compared with the same period of 2011. The firm said that this increase is largely due to Chalet Group buying the Philips High Tech Campus in Eindhoven for €425 million.
‘Whilst the overall investment volume in the Netherlands has decreased in the first half of 2012, investor interest in prime commercial property remains high. Forced sales will continue to come to the market in the second half of the year and into 2013, creating further opportunities for value added investors and private equity funds,’ said Jeroen Jansen, head of research at Savills in the Netherlands.
In terms of yields, Savills finds that financing constraints and limited liquidity in the market has forced prime office yields up by 20 to 50 bps in the last six months to between 5.6% and 5.9% net yield in the four largest agglomerations. Prime industrial yields have also risen on average 25 bps in the major markets, to for instance 7.25% in the Amsterdam/Schiphol area.
In the lettings market, due to a weak second quarter in the Netherlands, Savills records an overall take up volume of 1.83 million square meters in the first six months of 2012 across the office, industrial and retail sectors. This represents a decrease of 17% on the first six months of 2011 which saw take-up volumes of 2.20 million square meters.
Similar to the investment market, the office letting market recorded the best performance of all the sectors in the first half of 2012, with take up reaching 705,000 square meters, a decrease of 6.9% from the same period in 2011. The majority of office deals were concentrated in Holland’s key cities of Amsterdam, Rotterdam, The Hague and Utrecht.
‘We expect occupier demand for prime assets to remain stable in the rest of 2012 and 2013 across all commercial markets. Prime rents should also remain steady, while rental levels at secondary locations are under downward pressure due to lower demand and increasing vacancy levels, widening the gap between prime and secondary product,’ said Coen de Lange, head of office agency at Savills in the Netherlands.
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