Country Report Netherlands Q3-2018
“We are now seeing returns of just over 3 % for prime properties.”

Dear readers,

The Real Estate Economy Index for the Netherlands remains at a very high level, despite the slight decrease in the REECOX in the third quarter. Investor demand in the country remains high but there is a lack of available properties in many places. Pressure on returns is constantly increasing: We are now seeing returns of just over 3 % for prime properties. However, this year the volume of transactions will again exceed EUR 20 billion. High demand for almost all asset classes can be observed. Only the retail sector requires a more differentiated view: While properties in prime locations are performing well, the situation in B and C locations is more difficult. The fact that the dividend tax, which was under discussion, has not been introduced resulted in a positive market reaction, naturally above all from REITs.

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

Dutch Real Estate Economy Index shows consistency

After the Dutch Real Estate Economy Index reached its al- time peak last year, passing the 200-point mark and climbing to more than 208 points, it has fallen considerably since the beginning of the year. At the end of the third quarter it was just below the 200-point mark, at 199.3 points. Compared to the previous quarter, that equates to a slight decrease of 0.6 %, which is in effect constant. The Dutch Real Estate Economy Index therefore reflected the development of the Euro Score.

No negative trend in the business climate index

The initial REECOX variables were generally diversified. The Dutch leading index AEX 25 is currently extremely volatile: Following a sharp decline in June, it rose by 13.2 % in July, before falling again in the following months. By comparison, the third quarter ended at 549.6 points, representing a growth of 8.4 %.

Meanwhile, the real estate share index FTSE EPRA/NAREIT Netherlands could not maintain the level reached in the previous quarter. There were particularly significant losses in August and September. At the end of September, the third quarter closed at 1,057.3 points, a decline of 8.6 % compared to the second quarter.

The recent negative trend in the business climate does not appear to be solidifying. The assessment of real estate experts as reflected by the Economic Sentiment Indicator (ESI) resulted in a level of 109.5 points in September, an increase of 0.1 % compared to the previous month and a slight decrease of 0.4 % compared to the previous quarter.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2018

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1807/1808/18Q3-18Delta (%)
Q2-18 / Q3-18
DE
eq
up
eq
eq
eq
310.7
314.9
316.3
312.8
0.7
GB
do
do
up
upup
up
219.0
218.8
218.8
216.5
-1.1
PL
up
do
do
eq
eq
189.1
190.8
189.8
188.3
-0.4
NL
up
do
eq
eq
eq
200.4
201.5
200.5
199.3
-0.5
FR
up
do
do
eq
eq
237.7
238.9
237.9
236.2
-0.6
ES
dodo
do
dodo
eq
eq
204.1
200.7
198.8
196.4
-3.8