Record investment in Dutch rental housing
14 december 2017
Never before has so much capital been invested in Dutch rental housing. With the transactions to be completed during the coming weeks, the total investment volume will easily exceed 5 billion euros. This represents a 20% increase on 2016 and a more than threefold increase compared with 5 years ago. In addition to investments in existing portfolios, 2017 has seen a record sum invested in new-build rental properties in the mid-range rental segment (EUR 710-1.200). Investing in rental housing is attractive due to the low risk profile and the stable returns that can be realised.
Capital Value's analyses of the transactions show that private investors and international investors have particularly concentrated on existing housing. Dutch pension funds have been able to acquire a record number of new-build homes, predominantly single-family homes and apartments in the mid-range rental segment. Around 17,000 new-build homes were purchased in 2017, an increase of almost 35% on 2016. Most of these homes will be realised in 2018-2019.
Marijn Snijders: "It is good that Dutch pension funds have been able to purchase more new-build rental homes in 2017, thereby contributing to a reduction in the housing shortage. By selling their current properties and acquiring new-build homes, they have been able to rejuvenate their portfolio and increase its sustainability."
Still insufficient supply
The market is still offering insufficient investment opportunities for the capital available. From research by Capital Value it appears that between 5,000 and 10,000 extra new-build homes could have been sold in 2017, had more projects been available. The demand is greater than the supply. In 2017 this has led to an increase in the prices, a trend which is expected to continue in 2018.