Dutch commercial property markets have completed four-consecutive quarters of negative capital growth although the latest Q3 figure, at -0.8%, is the shallowest since the downturn, according to the ROZ/IPD Netherlands Quarterly Property Index.
The 12-month change in capital values is now -7.8%, driven by continued yield pressure, with initial yields at new highs in the Office and Industrial sectors at 7.6% and 8.2%, respectively. The overall re-pricing in the Netherlands has been far shallower than in the UK and Ireland. This, in part, is the result of an unbroken positive rental value cycle since global property markets first started to re-price in the summer of 2007. Rental value growth has edged up 10 basis points over the third quarter to 0.4%.
Overall, stable income returns, at 1.3%, together with the improved capital growth produced the first quarterly positive total return for 12 months, at 0.6%. At sector level, Offices and Industrials continue to suffer the greatest capital depreciation, at -1.1 and 1.0%, respectively. This is followed by Residential and Retail sectors, with 0.7% and 0.6%.
ROX Director Aart Horidjk said, "Capital depreciation continues to be driven predominantly by yield expansion; as by contrast, market rents have continued modestly rise."