Increased international interest in Dutch rented homes

3 maart 2015

London, 3 March 2015 – Interest among international investors in Dutch residential investments has increased considerably. For 2015, international investors indicate that they have over EUR 3 billion available to invest in Dutch rented housing. In 2014, international investors already invested a total of EUR 1.5 billion in Dutch rental homes, accounting for 50% of the total volume of investments on the Dutch residential market.

This is a historic turning point for the market, which was dominated mainly by Dutch investors in recent years. This is one of the results of the research conducted by Capital Value that was presented at a meeting held at the Dutch Embassy in London today. Over 40 key international investors attended the presentation.

As part of the research, over 250 international investors based in North America, Asia, the Middle East and Europe who operate in the European real estate market were approached regarding their investment policies. Approximately 40 of these investors are actively researching the Dutch market and filled out a questionnaire, which was followed by a number of interviews to complete the results of the research.

The Netherlands occupies a solid third place
A number of successful transactions in 2014 have positioned the Dutch residential market as an attractive investment opportunity. During the past year, a number of investors have clearly shifted from the preliminary phases to more concrete phases of the investment process (i.e. examining specific portfolios). Of all the investors analysed, 26% show an interest in Dutch rental homes. After Germany and the UK, the Netherlands occupies a solid third place on the list of European countries where international investors are considering investing in the years ahead. Most interest (88%) comes from investors based in the United States, the UK and Germany.

Over EUR 3 billion available
In 2014, international investors invested a total of EUR 1.5 billion in Dutch rental homes. For 2015, international investors indicate that they have over EUR 3 billion euros available to invest in Dutch rental housing. Because of the growing demand and the increased shortage on the market, international investors see that attractive yields can be achieved on Dutch residential portfolios. Whether these investments will actually be realised depends on the amount of suitable housing portfolios being offered on the market. The volume invested in 2014 mainly came from a number of large portfolios, e.g. the Vestia and Wooninvesteringsfonds portfolios. It remains to be seen whether the supply in 2015 will meet the high demand from investors.  

Long-term investments with a low risk profile
The majority of the investors surveyed are looking for larger volumes for medium/long-term investment with a low risk profile (core/coreplus). The investors surveyed point out that their geographical focus is mainly on the urban areas in the Randstad conurbation. However, recent transactions show that a large number of the portfolios acquired are not situated in these areas. The sale of the Servatius portfolio in the province of Limburg is a good example.

Marijn Snijders, Managing Director Capital Value: “In addition to private equity investors, more and more German pension funds are showing an interest in Dutch rental homes. They were involved in many transactions in 2014. They also realise that Dutch rental homes offer a stable risk-return for a longer period”.

Preference for existing complexes
Many investors prefer existing stock. The advantages of acquiring existing complexes are that direct income flow is generated and more information (including market) information about the position of the complex is available. About one third of investors are interested in new developments. The results of the research do not show a clear preference for regulated or non-regulated housing, as long as the investment fits the risk-return profile.

Interest in student housing
Just over one quarter of investors (26%) indicate that they are interested in student housing, mainly if they already gained experience with this type of housing in other countries.

Marijn Snijders, Managing Director of Capital Value: “Never before has so much interest and capital been available for investments in rented housing. The fact that international investors are mainly complementary to Dutch investors as well as the fact that foreign banks are showing an increased interest in providing loans may be a major boost for the Dutch residential market. International investors and Dutch pension funds together can provide a positive stimulus for the building sector by building new rental homes in order to reduce the shortages. 

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