Softening yields within the Dutch office market has made the Netherlands an opportunity driven market for the first time in more than a decade, according to real estate advisor Savills.
The firm does not expect overall 2012 investment volumes to exceed the 2011 total of 3.4 billion due to a challenging market with limited financing opportunities. This will result in upward pressure on yields, which Savills has already noticed in the Dutch office market where yields have softened by 30-50 basis points over the past months, and an opportunity driven market with sufficient purchasing possibilities for investors with access to capital.
Savills believes the investment market in Holland is ripe for investors with a more value added or even opportunistic approach. The proposed sale of the Philips High Tech Campus for approximately 450 million in Q1 2012 to private investor Chalet Group is the largest commercial transaction for many years and indicates that this type of investor has potential to increase market share in 2012.
Savills expects investors to focus increasingly on retail and industrial assets this year, as well as alternative sectors such as student housing, hotels and parking garages.
Jeroen Jansen, Head of Research at Savills in the Netherlands, says: "The current opportunity driven market in the Netherlands combined with continued caution from some institutional investors and funds mean there are great opportunities for investors with access to finance."
He adds: "2012 is also likely to show an increase of forced sales. The limited liquidity will however narrow demand for these opportunities, resulting in sharp price corrections for specific asset classes."
In terms of the occupier market, Savills expects the retail and industrial market to lead the way with demand for prime industrial and retail property still high, despite some cases of high vacancy in secondary properties. Take-up for commercial real estate in 2011 totaled 4.3 million m², up 13% on the previous year, due largely to industrial market demand which increased from 2.1 million m² in 2010 to 2.6 million m² in 2011.