High tenant demand for sustainable, affordable housing, healthcare real estate and retail real estate in sought-after locations in the Netherlands offers institutional real estate investors perspective in the coming years. Provided, however, that interest rates do not rise further. This is according to Achmea Real Estate’s Outlook 2024 - 2026.
The European Central Bank raised interest rates in recent years to cool the economy and inflation. Partly as a result, property markets have had a turbulent year, observes Casper Hesp, Director Investment Management at Achmea Real Estate. “Between September 2022 and September 2023, around 13 per cent of value evaporated in the Dutch property market. Such a depreciation in such a short time has not happened very often.”
Stabilising further
“Now that inflation is better contained, the ECB can grab the space to first stabilise interest rates and then perhaps lower them in the second half of 2024,” Hesp continued. “Lower interest rates will further stabilise property markets, in our view. This will create opportunities for institutional investors to re-enter.”
He cites underlying demand for sustainable, affordable housing, appropriate care property and retail as still high. “It’s more than ever about delving further into the needs of the property’s target groups. For instance, retail consumers are becoming more selective and demanding. Then retail real estate has to meet that. With care real estate, that quality is in good working environments for care workers and in suitable housing for seniors, so they can live independently at home for longer.”
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