Country Report Netherlands Q4-2018
“Returns of 4.5 % on logistics properties, that is really remarkable.”

Dear readers,

regardless which market actor you speak to at the moment, there is one topic that keeps coming up: the development of yields. It is increasingly clear that there is a shortage of high-quality properties in the Netherlands, and that is exerting further downward pressure on returns. In the current low-interest environment investors simply have no alternative to real estate investment. A transaction volume of approximately € 20 billion speaks for itself.  Even logistics properties are only generating returns of 4.5 % – that is really remarkable. Despite the current trend in the Deutsche Hypo REECOX, I have a cautiously optimistic outlook. The real estate market in the Netherlands remains intact. Above all, the asset classes residential, logistics and office properties remain in unusually high demand among domestic and foreign investors. Historically low unemployment in the Netherlands is surely having a positive effect.

Wouter de Bever

Contact

Mr Wouter de Bever
Managing Director Netherlands

Phone: +31 20 691 45 51
E-mail: Wouter.de.Bever@Deutsche-Hypo.de

Real Estate Economy Index for the Netherlands falls back to its 2015 level

The fourth quarter 2018 did not reverse the trend in the Real Estate Economy Index for the Netherlands. After recent slowing of the downward trend that has continued since 2017, it accelerated again at the end of the year. With a decrease of 4.0 % compared to the third quarter, to 191.3 points, it reached a level last seen in 2015. Overall, the REECOX score for the Netherlands decreased by 7.6 % in 2018, the second highest decrease of any country.

Real estate index at 20-year low

The performance of the FTSE EPRA/NAREIT Netherlands real estate index, which fell by a full 20.1 % compared to the previous quarter, was primarily responsible for recent developments. Its level of 844.6 points on the last trading day in December was the lowest in 20 years. The Dutch leading index AEX 25 also saw a double-digit fall: a decrease of 11.2 % compared to the previous quarter brought it to its current level of 487.9 points.

However, the negative development of the stock markets had almost no impact on the assessments of real estate experts as reflected by the Economic Sentiment Indicator (ESI). It only decreased by 1.4 % to 108.0 points, compared to the previous quarter.

Synopsis of Input Variables and Real Estate Economic Situations Q4-2018

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q3-1810/1811/18Q4-18Delta (%)
Q3-18 / Q4-18
DE
dodo
do
do
eq
do
312.8
306.0
308.2
298.2
-4.7
GB
dodo
do
do
eq
do
216.5
213.1
206.8
204.9
-5.4
PL
eq
do
eq
eq
dodo
188.3
185.6
188.8
187.5
-0.4
NL
dodo
dodo
do
eq
do
199.3
195.3
194.8
191.3
-4.0
FR
dodo
dodo
dodo
eq
eq
236.2
229.7
228.6
223.7
-5.3
ES
dodo
do
do
eq
eq
196.4
195.8
196.4
191.8
-2.3