Last week, Savills published the results of a survey conducted among all research departments in the international Savills network. They expect a more positive investment climate for real estate in 2024, with 57% expecting a moderate to strong increase in investment activity next year. Savills expects investment activity to pick up especially from the third quarter of 2024, driven by recovery in several major markets, including the US and the UK.

The local Market Intelligence team discussed these results with the Investment teams, and sets out the findings for you in this blog.

For the Netherlands, Savills expects a recovery in investment activity in 2024. Recovery is primarily driven by the stabilisation of European Capital Markets and the strength and a more positive outlook for the Dutch economy in 2024. Savills is most optimistic about activity in the Logistics market, due to strong market fundamentals and rental growth perspectives, with rents increasing against a backdrop of tight supply and demand ratios and resilient consumer spending in most areas. And despite a changing regulatory environment, residential markets offer solid fundamentals with anti-cyclical properties, especially Urban Multifamily and Purpose Built Student Accommodation (PBSA).

For the Dutch office sector, Savills expects mostly stable Prime Rent development. Only the very best buildings in the very best locations across the largest four Dutch cities (G4) are expected to experience rising prime rents. Meanwhile, secondary offices are expected to experience stabilisation or a small decrease in rents due to changing occupier foundations. Any rent rises for these secondary offices are likely to be dependent upon upgrading these properties.

Savills Research Top Picks for 2024, Depending on Investor Strategy:

Core and Core Plus Strategies:

• Prime CBD Offices (Amsterdam South-Axis, Utrecht Station Area, Rotterdam CBD) that meet occupier ESG Criteria. Especially very sizeable tickets, which can now be acquired on favourable price levels.
• Prime offices on public transport locations in larger, regional cities, with relatively high returns in comparison.
• Prime logistics in the main logistics hotspots.
• Prime logistics locations, albeit higher or lower quality, with short leases due to the reversionary potential.
• Prime Residential across places with strong urbanisation trends, especially multifamily and PBSA. Side note: investments in sustainability of product need to be made in order to maintain cashflows.
• Food-anchored retail, especially those with a higher exposure to food (>75%), such as local neighbourhood shopping centres.

Value-add Strategies:

• Repositioning of existing hotels, especially in ESG criteria within the context of tourists becoming more ‘environmentally aware’.
• Retrofitting of offices in ‘Prime’ & ‘Secondary’ locations, including offices in (the vicinity of) public transport hubs.
• Optimising strategies for residential product, such as investments in the quality of product to gain higher returns. This especially in the context of the higher attribution of sustainability in the ‘WWS-point system’.
• Brownfield developments near / on Science Parks, with ‘life science’ developments in particular.
• Logistics and light-industrial on multimodal locations with ESG optimizing potential (accelerating.
• Brownfield locations on existing business parks, with potential to retrofit / repurpose.

Opportunistic Strategies:

• (Partially) Vacant office properties on secondary locations in the ‘Randstad’ region, such as Sloterdijk and Zuidoost.
• High-rise residential developments.

In January 2024, Savills will publish the Market in Minutes report covering all of 2023.