2022 was clearly an eventful year for the Dutch economy as throughout the year inflation was at its highest rate since 1975, which affected all parts of the Dutch economy. The consequences for trade and industry in the Netherlands were mainly on the costs side. The mood among consumers too became considerably more negative towards the end of the year and not without reason: household budgets had become much more expensive.
Companies whose conditions have deteriorated the most are those most affected by increased costs of labour, goods, electricity, gas and financing.
In the logistics user market, the scarcity of available space in particular caused a declining take-up volume in 2022. The unhealthy supply-demand ratios continued in the logistics market, despite the slightly rising vacancy rate between Q1 2023 and Q1 2022.
Despite deteriorating economic conditions, no decrease in the average rent per square meter per year was visible in any market segment. In the office market, the spread between top rents and the average rent actually increased. The opposite happened in the retail market, where this spread narrowed.
The impact of economic uncertainties is visible in the housing market, where purchase prices per square meter fell compared to last year and the supply of homes for sale increased. Due to uncertainties, both economic and geopolitical, investors have historically limited themselves to domestic investments.
Nevertheless, the foreign capital invested in Dutch real estate in 2022 is still in line with the total invested volume of foreign investors in previous years.
We expect demand from office occupiers to remain robust in 2023, as the market is still tight, especially of product that meets ESG requirements. Landlords do not have to worry about existing tenants and possible new tenants in the coming year. The challenge in 2023 will be refinancing and sale and acquisition options. We expect investors to be cautious about investment activity, and advise them to keep in touch with their tenants. 2023 is the year to invest in tenant satisfaction.
Clive Pritchard, Head of Country