Savills latest Market in Minutes report details a promising outlook for the Dutch real estate sector, bolstered by improving investor sentiment and strong market fundamentals, despite ongoing economic uncertainties.

In the first quarter of 2024, despite a year-on-year decrease of 2.5% in investment volumes, amounting to €1.7 billion, signs of recovery have emerged. Notably, investor sentiment has rebounded significantly, recording a 27.9% increase since reaching its nadir in March 2023.

The report highlights key sectors showing resilience and growth potential. The residential sector, despite facing its weakest quarter since Q1 2012 with a 60.4% drop year-on-year, is poised for a rebound as government regulations stabilize. Retail and light industrial sectors have demonstrated stronger performance, with retail leasing activity up 11.3% year-on-year.

Niek Poppelaars, Co-Head of Logistics & Industrial at Savills in the Netherlands, comments on the light industrial market: "While the sector faced challenges with electricity availability, strong underlying market fundamentals have encouraged continued investment. With 70.5% of the light industrial LFA located in areas with restricted electricity access, strategic investments in sustainability and energy resilience are becoming increasingly important."

Further data from Savills indicate a cautious optimism, with a stable Gross Initial Yield across sectors and a projected rise in transaction activities due to softer policy interest rates expected from June 2024. The anticipation of more accommodating financial conditions has led to a renewal in investor confidence, vital for the recovery of the market. Savills forecasts a total investment volume between approximately €8.4 and €9.1 billion in 2024.

Read the full report here.