Savills

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Market in Minutes Full year 2023

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A COMPREHENSIVE OVERVIEW OF THE DUTCH REAL ESTATE MARKET.

In its quarterly ‘Market in Minutes – The Netherlands’ report, Savills states that the Dutch real estate market faced headwinds in 2023 due to a challenging business climate, leading to both investors and occupiers taking a cautious approach.

Key findings:

  1. Occupier markets - Leasing activity across all sectors was down 25.8% in 2023 compared to 2022, with the office (-26.6%) and industrial and logistics (-27.2%) sectors performing especially poorly due to unfavourable market conditions throughout 2023.
  2. Investment activity and yield movement - Investors have been cautious about investing in Dutch real estate in 2023 as investment volumes fell by 57.3% compared to 2022, with Q4 2023 decreasing by 64.4% compared to Q4 2022. The total investment volume in 2023 was €8.03 billion. The spread between GIYs (excl. Purchasing Costs) and the yield on Government Bonds (AAA – EU – 10YR Maturity) is expected to even out between 250 BPS and 450 BPS in the coming 3 to 9 months, depending on the sector.
  3. ESG as the key demand variable in 2024 - Leasing activity is increasingly being dominated by demand for properties that support occupiers’ ESG-demands. The share of take-up of ESG-compliant properties increased by 8.7% YOY, 4.7% YOY, and 2.4% YOY for the office, retail, and logistics sectors, respectively, in 2023.
  4. Recovery in 2024 - Savills believes that 2024 will be characterised as a year of recovery. Investment and leasing activity is likely to pick up with the end of ECB interest rate increases and the stabilisation of the economy in sight. However, we foresee the most sought-after ESG-compliant buildings will remain in tight supply due to the limited number of projected developments in 2024.