SUPER CONNECTED GLOBAL REGION Investment opportunities in the Dutch G4 cities
Top development projects
Amsterdam
International investors get on board Government sets sights on global capital
The Hague
Rotterdam
Utrecht
Connectivity is the big Dutch cities’ secret weapon
Amsterdam. Utrecht. Rotterdam. The Hague.
Working together The combined scale of the Dutch G4 cities GDP (in € bns) Amsterdam Utrecht Rotterdam The Hague G4
Population (Metro Area, in millions) 2.74 1.25 2.12 1.46 7.57
109 52 77 50 288
Area of metro region, km²
Nature of Economic Assets
Key Infrastructure
4,100 1,450 2,670 769 8,989
Services, creative industries Services, trade transport, media Trade, transport, logistics Services, public sector, justice Services, trade, human capital
Schiphol airport, universities Port of Utrecht, Utrecht University Port of Rotterdam Universities in metro area Container ports, international airports, multiple universities, institutions, and talent
Connectivity
Infrastructure
The distance between the G4 cities in minutes
Highly ranked in leading city indicators
A 50 H 24
24 37 38
R
No. of Cities Amsterdam Utrecht Rotterdam The Hague G4
U
38
Mori Global Power City Index ‘Accessibility’ 40 3rd – – – 1st
fDi European Cities of the Future ‘Infrastructure’ 25 1st 2nd 3rd – 1st
Safe Cities Index ‘Infrastructure Safety’ 50 4th – – – 1–2nd
Nine points to remember The Dutch G4 as a European metropolis and investment area
University cities
Quality of life
More top ranked educational institutions
Mixing the best of the G4
QS 1 10 12th 45–50 75–80 90–100
2
London G4 Paris Amsterdam Utrecht Rotterdam
5 6 3 2 1 1
Times Higher 7 5 5 1 1 1
Shanghai Jao Tong 4 5 5 3 1 1
No. of Cities Amsterdam Utrecht Rotterdam The Hague G4
Mori Global Power City Index ‘Liveability’ 40 8th – – – 5–7th
Safe Cities IESE Cities in Arcadis Index ‘Personal Motion ‘Social Sustainable Safety’ Cohesion’ Cities Index ‘People’ 50 135 50 9th 26th 7th – – – – – 1st – – – 5–7th 18–22nd 3–4th
Connectivity is the big Dutch cities’ secret weapon THE NETHERLANDS’ FOUR LARGEST CITIES – AMSTERDAM, UTRECHT, ROTTERDAM AND THE HAGUE – ARE ALL UNIQUE, WELL-KNOWN AND SUCCESSFUL IN THEIR OWN RIGHT. BUT COMBINE THEIR ASSETS TOGETHER, AND THEY FORM ONE OF THE MOST SUCCESSFUL CITY REGIONS IN THE WORLD.
Four cities, one region • Best infrastructure and connectivity in the world • Potentially Europe’s premier innovation hub
‘A
re we talking about four small high quality cities with their own markets or is this in fact another member of the first tier of global city regions?’ asked professor Greg Clark, an expert on cities and urban development, at a recent briefing on the Dutch investment market in London. The answer, says Clark, is obvious. While Amsterdam, Utrecht, Rotterdam and The Hague all have unique assets and functions, they also form a distinct region that can rival London, New York and Tokyo. The combined scale of the four cities is one aspect of this. The population totals 7.57 million, with combined GDP of €288 bn, making the region the sixth most productive European hub. The region covers an area of nearly 9,000 square kilometres but its infrastructure and connectivity are unrivalled. ‘There is no better connected place in the world, if you treat the four cities as one region,’ Clark says. ‘This connectivity is the region’s secret weapon.’
Unique combination In addition, the four cities’ complementary assets form a region with a unique combination of specialisms in business, culture, creativity, manufacturing, logistics, higher education and diplomacy. ‘The four cities have the “can do” Dutch spirit as well as a business and investment environment that is carefully nuanced towards the needs of international capital,’ Clark points out. While individually all four cities are among the top 200 most globalised cities in the world, combined into a single entity they are in the top 12, on a level with Greater Sydney and the Chicago metropolitan region. ‘They have the international connectivity, they have the prestigious institutions,
• More liveable than Zurich, Barcelona and Sydney • One of the three largest urban systems in Europe • Sixth biggest employment market in Europe • The sixth highest GDP in Europe Professor Greg Clark CBE is a city and regional development advisor, speaker and facilitator, and advises on regional planning at city authorities all over the world. He is currently senior fellow at ULI EMIA and an advisor to the OECD.
they have the decision-making operations, they have the corporate hub, they have the knowledge based institutes, the liveability and the scale,’ says Clark.
Innovation Pooling their resources and strengths raises the profile of the region in terms of innovation and research and creates what is potentially Europe’s premier innovation hub, argues Clark. ‘This is because of the spread of innovation industries, from clean tech to bioscience to the digital economy across to food, urban design and engineering,’ he points out. ‘This is a broad-based innovation ecosystem which is able to support a number of sectors and to cross fertilise.’ In terms of quality of life, Clark highlights
• Combined population 7.5 million • Second only to Paris as a conference destination the improved cost of living and housing – pointing out that prices are lower outside Amsterdam. There is a better regional work-life balance, lower crime and wonderful cultural facilities, he says. ‘Its polycentric character means the region is not only more liveable but also more flexible,’ Clark says. The region is able to grow without the problems of single city metropolises because the approach to development can be flexible. ‘The combined scores of the four-city metro politan area places Amsterdam, Utrecht, Rotterdam and The Hague as a world beating competitive region,’ Clark says. ‘And it has the scale needed to attract major investments and the ability to grow in a balanced and well-distributed way.’ 3
Open for business: investment opportunities in the big Dutch cities INVESTORS ARE BACK ON BOARD WHEN IT COMES TO DUTCH REAL ESTATE, BUOYED BY GOOD ECONOMIC DATA, GDP GROWTH AND HIGH CONSUMER CONFIDENCE. AMSTERDAM, UTRECHT, ROTTERDAM AND THE HAGUE ARE ALL LOOKING FOR INTERNATIONAL PARTNERS TO DEVELOP MIXED-USE SCHEMES.
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he global appetite for city living is having an impact on the four big Dutch cities, all of which are growing far more quickly than the rest of the country. At the same time, the connectivity between them is a huge advantage in development terms because the distances to travel are so short. Living in Utrecht but working in Amsterdam is an easy option for today’s mobile workforce. And all four cities are busy locating and developing new sites to cope with their expanding populations. Amsterdam has a rich history in terms of city
‘One of the most interesting areas still being developed in Amsterdam is the famous water front along the IJ waterway. The Overhoeks and Buiksloterham districts on the northern side have opportunities for investment in mixed use projects involving at least 1,000 residential units. These are top inner city locations’, says Van Rossum.
Expansion
Utrecht also has a medieval city centre and is distinguished by its knowledge, innovation and creative industries as well as a healthcare hub. The city has a young, highly-educated population and the university alone has around 60,000 students. ‘More than 40% of these young We want to create a people remain in the healthy urban environment city,’ points out Alfor the future population” bert Hutschemaekers, Albert Hutschemaekers, Utrecht Utrecht's chief of business development. ‘We want to facilitate this expansion and so the city council has identified three major locations for develdevelopment, from the 17th century canal opment: the Leidsche Rijn residential district, developments to the present day, says Pierre the area around the city centre station and van Rossum planning chief at Amsterdam the Uithof science park.’ All three projects city council. Indeed, the city has been active are currently in development although there throughout the crisis in developing new are opportunities still open to international schools and cultural centres such as the EYE investors. film museum. In particular, the area Over the next 10 years, the city is planning to around the main railbuild 50,000 new homes as well as offices in way station is being the Zuidas business district, hotels, and retail opened up to 120,000 premises. Much of this investment will be m² of offices plus focused in the areas close to the city’s ring housing and leisure road. Among the opportunities available for development with investors is the redevelopment of a former the aim of creating a prison complex residential area plus sites new city centre hub. along the IJ waterway which bisects the city The Leidsche Rijn new and along the Amstel river. town will have an
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There are many top locations still to be developed on the northern IJ waterfront'”
Pierre van Rossum, Amsterdam
eventual population of about 80,000 people. Although much of the project is under construction, opportunities remain for the development of some 9,000 homes. In the future, Utrecht has plans to develop old industrial sites along the waterways, most of which will be opened up to housing. The waterways in Amsterdam, just 24 minutes by train from Utrecht, are also at the forefront of the city’s expansion, with interesting developments planned along both the former harbour frontage and the Amstel river.
Families Rotterdam, by contrast, has many inner city sites which are ripe for redevelopment, says Hans van Rossum, head of area development for Rotterdam. ‘Rotterdam is a young, growing city and we are looking for more places for those young people and families to live,’ he says. ‘And they want to live within the city boundaries.’ The city is focusing on developing its food, medical and clean tech industrial clusters, and the port authorities, Erasmus University and Delft University of Technology are working closely together to stimulate innovation and economic development. This, combined with landmark architecture,
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Rotterdam has a real, industrial ‘we can make it happen’ mentality”
Hans van Rossum, Rotterdam
were among the 53 heads of state who attended the Nuclear Security Summit we hosted. The field of cyber security, dubbed The Hague Security Delta, is becoming increasingly important in the city and is also bringing in more expats. The city is growing by around 6,000 people a year which requires adding some 1,500 to 2,000 apartments to the city’s housing stock on an annual basis. Some innovative projects are under way in the city centre involving transforming former government buildings into housing and university facilities. Many are in prime We are a growing city locations and this and so we need extra is a major draw to housing to be built quickly” national and inter Henk Harms, The Hague national investors, says Harms. ‘Economic activity does not stop at the city boundaries. And it is very useful to recognise the international organisations, including parts cities as being part of a greater system.’ of the UN. It is also a major conference For Amsterdam, Utrecht, Rotterdam and destination, points out Henk Harms, The Hague’s top investment picks, see head of area development in The Hague. pages 6-9. ‘Last year Barack Obama and Xi Jinping
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PHOTO: KARLA GOWLETT
means the city has many opportunities open to international investors, Van Rossum says. One project currently in the planning stage is known as Parkstad and involves building up to 600 family homes. The second is situated on an island in the Maas river and covers two plots with a total of 335 apartments. While Rotterdam focuses on its industrial heritage, The Hague is proud of its reputation as an international city for peace and justice. The city is the political heart of the Netherlands and home to some 240
Investing in the Netherlands City officials from Amsterdam, Utrecht, Rotterdam and The Hague presented their wide range of investment opportunities to international investors at a special briefing on investing in the Netherlands in London in early September. The day-long event was organised by PropertyEU. Dutch housing minister Stef Blok, who has implemented a major reform programme to boost the Dutch real estate market, was a keynote speaker and answered questions from investors and developers. See page 11. For more information on this event, go to www.propertyeu.info/events
Zuidas is Amsterdam’s main business district and straddles the A10 ring road in the south of the city. With a busy train station, excellent motorway connections and close to Schiphol airport, Zuidas is in easy reach of Utrecht, Rotterdam and The Hague. This connectivity is crucial to its success, says Robert Dijckmeester, commercial director of the Zuidas organisation. Now national and local government have agreed to pump in an extra €2bn to improve the transport services by expanding both the station and the motorway. The nature of the district is now changing, says Dijckmeester. ‘It is becoming a vibrant part of the city and this means investment opportunities are also changing. It is becoming a much more mixed area.’
PHOTO: MARC DORLEIJN
Zuidas’ connectivity is key to its success
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Top Investment Picks
Amsterdam
Amsterdam is the cosmopolitan cultural capital of the Netherlands and its entrepreneurial spirit has a unique global reach. The city boasts a strong international position in financial and business services, IT, media, the creative sector, higher education and logistics. The city has a range of interesting projects for international investors and the city council is actively stimulating the redevelopment of office space. Over 10,000 residential units are being built every year. AMSTERDAM OVERHOEKS Overhoeks is a comprehensive mixed use waterfront development near the heart of the historic city centre. The emerging high rise skyline contains residential development of 90,000 m² and a mixture of creative and music businesses, a conference hotel, offices, education, museum and leisure. Planning status: Two plots to develop. Tower 5: 30.000 m² residential/mixed use. Tender 2015 Q4. Tower 7: 30.000 m² residential/mixed use. Tender 2016 Q4. Contact: Pascal van der Velde p.van.der.velde@amsterdam.nl +31 (0)6 531 713 67
SLOTERDIJK CENTRUM AREA DEVELOPMENT This project involves transforming an office-dominated area in the west of Amsterdam into a vibrant mixed use development. The district is super-connected to Schiphol Airport, the city centre and the popular Westerpark complex and park.The development includes 1,500 residential units Planning status: Zoning plan available. The first tender round will take place in Q1, 2016. Contact: Ellen Nieuweboer e.nieuweboer@amsterdam.nl +31 (0)6 216 894 92
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Top Investment Picks
Utrecht
Utrecht is a thriving city in which citizens, companies, knowledge institutes and the local government combine their strengths in creative entrepreneurship, life sciences and game-based smart solutions to foster a healthy, inclusive society. Utrecht city is at the centre of the most competitive region of Europe and boasts a vibrant cultural climate. This combination creates ideal conditions for healthy, green and smart urban living. UTRECHT STATION AREA Utrecht’s central station area is a major transport, retail and business hub and is used by 88 million people every year. The redevelopment programme to effectively extend the city centre was started in 2003. It includes 2,200 homes, 250,000 m² of offices and 47,500 m² of retail and service space. Planning status: Several projects, like the Tivoli Vredenburg entertainment complex and new city council offiices have been completed. Others such as the new public transport terminal are now under construction. Long-term planning aims to complete building in 2030. Contact: Information Centre Station Area, +31 (0)30 286 96 50, www.cu2030.nl
LEIDSCHE RIJN The Leidsche Rijn project is effectively the Netherlands’ largest building site, creating a new residential area. In total, the district will have 31,000 houses, and 9,000 still have to be built. Investments in commercial real estate include the Leidsche Rijn centre and Papendorp. Planning status: 8,500 homes between 2015 and 2018. Leidsche Rijn Centre programme of 800,000 m² GFA includes retail, housing, offices and cultural facilities Contact: Jeen Kootstra (j.koostra@utrecht.nl +31 (0)30 286 0135 www.utrecht.nl/leidscherijn
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Top Investment Picks
Rotterdam
Rotterdam is a young, dynamic and international city with a beating heart. Rotterdam offers a gateway to Europe thanks to its smart port and innovative manufacturing with a leading role for the clean tech, food and medical clusters. The city authorities are transforming the centre and port areas into high-quality, modern, sustainable living and working environments. Growing international attention and investments have resulted in a lively and vibrant city. PHILADELPHIA & HAVANA Two mixed use projects are being planned on the Rijnhaven quayside next to the Luxor theatre in the heart of Rotterdam. Between them Philadelphia and Havana will offer 65.000 m² floor for apartments, offices, commercial spaces and public parking. The location on the Wilhelminapier is situated at the foot of the Erasmus bridge and represents the very epitome of modern Rotterdam. Planning status: The projects are slated for completion by 2020. The investment volume is negotiable and the properties will have a rental price of between €800–€1,300 per month. Contact: Hans van Rossum, head of Area Development Rotterdam, jp.vanrossum@ rotterdam.nl, tel +31 104899539
PARKSTAD Close to the city centre, this residential district links the magnifcent modern architecture of the Kop van Zuid on the southern river bank with the traditionally working class Afrikaanderwijk residential district. The project involves the development of 300 family homes and 300 apartments for both the rental and owner-occupied sectors. Various mid and high-end price categories. Flexible plots. Planning status: The location is owned by the city of Rotterdam and has been prepared for construction. No developers are involved. Contact: Hans van Rossum, head of Area Development Rotterdam, j.vanrossum@ rotterdam.nl, tel +31 104899539
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Top Investment Picks
The Hague
The Hague is the international city of peace and justice. This coastal city is home to some 240 international organisations and is the second UN centre in the world. The Hague has high level decision making in its DNA. This in turn has made it an attractive location for companies such as Shell, Total and Siemens. The city’s international character and excellent standard of living attract some 6,000 new inhabitants every year, making it an interesting location for investors in real estate. WIJNHAVEN AND SPUIKWARTIER The very heart of the city is being intensively redeveloped. The first phase, involving housing, retail and the largest office building in the Netherlands, has already been completed. Currently two former office buildings are being transformed into 170 housing units, leisure facilities and auditoriums for the University of Leiden as part of phase two. Planning status: Construction of a brand new cultural complex will start in 2016 along with a complete overhaul of the public space with additional housing and leisure facilities. To be completed by 2019.
KYOCERA AREA Kyocera Area is located at only 15 minutes by car from the historic centre of The Hague. The airports of Rotterdam, The Hague and Amsterdam can be reached in 20 and 30 minutes respectively and the centres of Amsterdam and Utrecht in 45. Planning status: Greenfields project. 25,000 m² are available for development. These plots owned by the city are adjacent to the local football stadium and suited for leisure functions. A mixed programme might suit the area well. Contact: Esther de Vor esther.devor@denhaag.nl +31(0)6 250 14 290
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Investment outlook: the big four cities lead the way THE DUTCH REAL ESTATE MARKET MAY HAVE BEEN OUT OF FAVOUR IN RECENT YEARS BUT IS NOW BACK IN VOGUE WITH INTERNATIONAL INVESTORS. KEY DRIVERS INCLUDE IMPROVED ECONOMIC GROWTH AND A RISE IN CONSUMER SPENDING, AS WELL AS GOVERNMENT REFORMS.
I
n a European context, the Netherlands was slow to recover after the financial crisis but has since turned the corner, Michael Hesp, head of Netherlands strategy and research at CBRE Global Investors told a recent investment briefing on the Dutch real estate sector. Unlike in many other countries, the housing market was hit hard by the crisis but that too is improving, he said. Manufacturing confidence is high, which is good news for logistics. Business sector confidence is also rising, which means there may be potential for rent increases. These positive changes have not gone unnoticed and foreign investors are moving in. In the first six months of 2015, 73% of investment in real estate was cross border money, of which 35% came from the US and 15% from the UK. Investment volumes are also rising and by the end of June, were 30% up on 2014. This, says Hesp, has put the Amsterdam, Utrecht, Rotterdam and The Hague metropolitan region in the top five most liquid markets of Europe at the moment.
Local knowledge ‘A lot of people want to get into the investment market in the Netherlands and they want to pick up the right bargain,’ Boris van der Gijp, director of strategy and research at Syntrus Achmea Real Estate and Finance, told the conference. ‘This is difficult because there are limited investment opportunities and, like everywhere else in the world, you have to move up the risk curve. This requires local knowledge and research. A local network is very important.’ Large scale projects, areas in the process of gentrification, alternatives like healthcare and residen-
Investments in the Netherlands 2007–2014 (€bn) 12
10
100
8
80
6
60
4
40
2
20
0
0 2007
2008
2009
2010
tial mortgages and A buildings in B locations and vice versa, all offer good potential in a market beset by shortage of supply.
Key retail The Dutch retail market can also be very interesting to international investors, but local knowledge is key. Internet has had a major impact on the high street and people are also more choosy about where they want to shop. In a recent report on the Dutch retail sector, Bouwinvest states that it expects investment and user pressure will continue to focus on the major cities. ‘The large cities continue to rely on interest from (international) retailers and investors. The
2011
2012
2013
2014
result of this is a stable, albeit relatively low direct return of some 5% due to negligible vacancy rates,’ the report states. ‘The best locations can expect to see modest rental growth.’ Retail may be rising but in 2015, office sector is leading the way. The office market has very high initial yields and an attractive risk premium and is also picking up in the best locations. ‘We still see vacancy rates of up to 30% outside the key locations’, says Van der Gijp. ‘This means investing in the office market is very risky and only the best locations are suitable for core strategy.’ The big four cities account for 40% of the country’s office space, Van der Gijp points out.
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Boris van der Gijp, director strategy and research, Syntrus Achmea Real Estate and Finance
Harm Janssen, director BPD region North-West
To invest in the Netherlands you have to move up the risk curve and this requires local knowledge, research and a local network”
10
— Percentage foreign investors
O Office O Retail O Industrial/logistics O Residential
There is solid, even rising demand for housing, especially in the economically strong metropolitan areas, like Amsterdam and Rotterdam”
PHOTO: AATJAN RENDERS
The IJDock on an artificial island on Amsterdam’s waterfront includes law courts, a hotel and residential property
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It started in Amsterdam and now the Dutch capital is rocketing. All over the Netherlands the market is going up”
Michiel de Bruine, head of asset management residential, Bouwinvest
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The key cities in the Netherlands and their private area development partners offer a range of distinctive investment opportunities in the residential sector”
Roel Vollebregt, chairman of the management board, AM
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PHOTO: AATJAN RENDERS
Rotterdam’s new central station was voted best building of 2015 by the Dutch architects’ association BNA
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Competition for plots is heating up. If you want to develop, you need to talk to the cities at an early stage”
Marcus Cieleback, Patrizia Immobilien
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Residential is reliable, predictable, stable and correlated to inflation... the supply side statistics from an investor's point of view look attractive”
Jos Short, Internos Global investors
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Dutch government sets sight on international capital THE DUTCH GOVERNMENT IS BRIMMING WITH INITIATIVES TO ENCOURAGE INTERNATIONAL INVESTORS TO PUT THEIR MONEY INTO THE COUNTRY’S REAL ESTATE SECTOR. HOUSING MINISTER STEF BLOK HAS A THREE-PRONGED ATTACK TO OPEN UP THE DUTCH PROPERTY MARKET TO GLOBAL CAPITAL.
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utch housing minister Stef Blok is a man with a mission: to transform the Dutch real estate markets and overhaul the residential property sector. To do this, he is taking a three-pronged approach. Firstly, he is continuing efforts to reform the Dutch housing market and ensure the country’s housing corporations dispose of surplus stock. He has also launched an ambitious programme to transform the Netherlands redundant office complexes into housing. The third challenge focuses on the disposal of surplus government buildings. Between 2011 and 2020, the Dutch state plans to dispose of more than half its total office stock. His efforts are beginning to pay off. Foreign investors are turning their attention to the Dutch residential sector and several major portfolios have been sold over the past year. For example, Aberdeen Asset Management is currently invested in offices, logistics and retail in the Netherlands but Pertti Vanhanen, global head of property, believes the time is right to look into Dutch residential.
needs but their powers are now being curbed and this will free up more space for private investors to develop real estate, Blok said. ‘The big cities are making this change already.’ One option is for investors to work in partnership with Amsterdam, Utrecht, Rotterdam and The Hague to develop rental apartments in mixed-use schemes. Marcus Cieleback, head of research at Patrizia Immobilien, told the briefing that the big Dutch cities are seriously interested in engaging with investors. ‘The question is really about the availability of land and the use it is put to,’ Cieleback said. ‘Given that house prices in the Netherlands have now stabilised, the competition for plots is heating up. If you want to develop, you need to talk to the cities at a very early stage.’ As well as new developments, Blok is hoping to encourage foreign investors to buy into existing properties as the government seeks to sell off surplus stock. In 2014, the government sold off property worth €125m, ranging from offices to a marina and even a World War II bunker. The government, the minister points out, is one of the largest real estate managers in the Netherlands and this makes it also the biggest owner of empty office properties. ‘The good news is that these are usually on good locations,’ Blok said. ‘Some have been transformed into hotels and there is a trend towards converting well-located offices into accommodation, particularly in the larger cities.’
Competition
Local knowledge
There has been too little international involvement in the Dutch real estate sector for too long, Blok told a recent briefing on the Netherlands’ investment market. ‘It is always good for a market if there is competition and liquidity,’ Blok said. ‘And it is always good for an economy if foreign money flows in.’ Traditionally, local authorities have turned to social housing corporations to meet their housing
The housing minister is aware that good knowledge of the market is crucial to determine which government properties – be they grand buildings which used to house ministries or empty prisons - might be of interest to foreign investors. The government is currently disposing of property in Amsterdam, Utrecht, Rotterdam and The Hague and in June launched trials of a new way of selling govern-
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The Netherlands and its cities are attractive to us and our investor base if we can tick a lot of key boxes”
Pertti Vanhanen, Aberdeen Asset management
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It is is always good for a market if there is competition and liquidity and it is always good for an economy if foreign money flows in”
Stef Blok, Dutch housing minister
ment property, by inviting private developers to place bids on six selected buildings. If the trial is successful, it will be used to generate interest in a large part of the portfolio currently being sold off. Popular properties may also go to auction. Asked if any more reforms were planned for the residential sector in the near future, Blok said: ‘I don’t expect to make any more major legislative changes because the measures we have taken are having a gradual impact.’
Housing minister Stef Blok introduced a package of reforms to boost the property sector: • Large-scale sell-off of government property • Focus on converting offices to new uses • More restrictions on mortgages, boosting attractiveness of rental housing • Housing corporations to sell off non rent-controlled properties • Landlords given more leeway to raise rents in rent-controlled housing 13
Home sweet home: Dutch residential property in demand AMSTERDAM, UTRECHT, ROTTERDAM AND THE HAGUE ARE ALL ACTIVELY BOOSTING THEIR HOUSING SUPPLY THROUGH A COMBINATION OF REDEVELOPMENT AND NEW BUILD. AT THE SAME TIME, THE GOVERNMENT IS SHAKING UP THE REGULATED DUTCH RENTAL MARKET.
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utch investors have long been active in domestic housing, but until now few foreign investors have entered the market, which has been characterised by its strong social housing sector and low rents. But now the opportunities for institutional investors in the Dutch housing market are increasing as government reforms begin to have an impact. The government shake-up includes restrictions on mortgages, so that more people will be encouraged to turn to the private rental sector, with a bottom line rent of €710 a month. Housing corporations have also been told to sell off their non rent-controlled properties to the private sector and return to their core role as suppliers of social housing. In the Netherlands, the residential market is characterised by strong growth around the big cities of Amsterdam, Utrecht, Rotterdam and The Hague, partly because
of the shortage of land within the cities themselves. ‘This is all down to connectivity,’ says Marcus Cieleback, head of research at Patrizia Immobilien. ‘It is very important to focus on connectivity because you have to get your tenants to the places where they work.’
Growing population For investors ready to grasp the opportunities offered by the Dutch residential market, partnerships with the big cities are a vibrant option. Amsterdam, for example, aims to create 50,000 new homes in the next 10 years as well as transform empty offices into housing, says Pierre van Rossum, planning chief at Amsterdam city council. ‘I do think there is space for international investors to get involved in these projects,’ he says. Utrecht too is keen to boost its housing supply for young starters and families and elderly people as well as for its growing
Student housing is a growth area
PHOTO: AATJAN RENDERS
With no strong tradition of students renting in the private sector, student housing is a growth area in the Netherlands. Amsterdam, Utrecht, Rotterdam and The Hague are popular student cities and new players such as the Student Hotel group have moved into the market to create their own niche. The internationalisation of university education is also having an impact, says Frank Uffen, co-founder of the Student Hotel initiative. ‘Governments are not interested in finding student accommodation and universities and cities are turning to the market to come up with solutions that offer beds and other integrated services,’ he says.
The Johanna student housing complex in Utrecht's Uithof science park
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Regulation is not per se a drawback to investors”
Marcus Cieleback, Patrizia Immobilien
student body and has earmarked three main areas for development, all of which are open to international investors. In Rotterdam, the council aims to develop mixed use projects targeting workers active in the city’s key industries. ‘Most of the projects are residential projects in the high end of the market,’ the city’s head of planning Hans van Rossum says. The Hague too is expanding. ‘We need a lot of new housing every year to accommodate our growing population,’ says Henk Harms, planning chief. ‘We are looking for both national and international investors to invest in the city, with opportunities both in the centre and the suburbs.’
Huge rental sector Some 43% of Dutch housing is rental, and of that most is rent-controlled and owned by housing corporations. This makes residential one of the most political sectors that investors can get involved in. But this need not be a problem. ‘Regulation is not per se a drawback to investors. It is only if regulation is not stable that it gets tricky,’ says Cieleback. And at the same time, regulation allows investors to calculate, for example, how rents will rise over time, he points out. Last year, Patrizia acquired the €578 mln Vestia housing corporation portfolio with some 5,000 units. Nevertheless, this, and other investments at the time, did not trigger a scramble for Dutch stock as some expected. According to Alexander Buijs, associate director of residential capital markets at CBRE, 70% of this year’s residential transactions have involved new build, mostly on a forward funding basis. Nevertheless, he believes more housing corporation portfolios will be released to the market in the coming months.
PHOTO: AATJAN RENDERS
Striking modern office complexes provide a stunning backdrop for the 18th century Dutch parliamentary complex in The Hague
Vleuterweide is part of the new Leidsche Rijn residential district in Utrecht, characterised by its village feel
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A super-connected global region The four big cities of the Netherlands, the G4, are presenting themselves at EXPO REAL 2015 as a major European metropolitan investment area. They have been joined by some of the Netherlands’ leading property investment firms to highlight the opportunities available in Amsterdam, Utrecht, Rotterdam and The Hague. As Europe’s best-connected region, with many international and
innovative institutions and stable economic growth, it offers investors a world-class business and investment climate. This polycentric metropolis has a rich and distinctive history, a global orientation and an excellent quality of life. Its performance is strengthened by both the similarities between each of the four big cities and their surrounding towns as well as their complementary specialisations.
Private Partners & Sponsors
Public Partners
ABN AMRO Real Estate Clients
Heijmans
Almere
Port of Amsterdam
Robert van Deelen
Peter van der Gugten
Jan P. de Groot
Francis de Wit
robert.van.deelen@nl.abnamro.com
pgugten@heijmans.nl
jpdegroot@almere.nl
Francis.de.wit@portofamsterdam.nl
www.abnamro.com
heijmans.nl
www.almere.nl
www.portofamsterdam.nl
AM
Hurks
Amstelveen
Rotterdam
Michel Westbeek
Erik Leijten
Martie de Boer
Hans van Rossum
michel.westbeek@am.nl
e.leijten@hurks.nl
m.de.boer@amstelveen.nl
jp.vanrossum@rotterdam.nl
www.am.nl
www.hurks.nl
www.amstelveen.nl
rotterdam.nl
The Hague Bouwinvest
Park 20|20
Amsterdam
The Hague
Nicolette Klein Bog
Rob van den Broek
Bob van der Zande
Marielle Rillaerts
n.kleinbog@bouwinvest.nl
rob@deltadevelopment.eu
b.van.der.zande@amsterdam.nl
marielle.rillaerts@denhaag.nl
www.bouwinvest.nl
www.park2020.com
www.amsterdam.nl
www.denhaag.nl
BPD
SADC
Businesspark Haaglanden
Utrecht
Harm Janssen
Aad Lafeber
Paul van Joolingen
Pim Sanders
h.janssen@bpd.nl
a.lafeber@sadc.nl
pvanjollingen@akronconsult.nl
p.sanders@utrecht.nl
www.bpd.nl
www.sadc.nl
businessparkhaaglanden.nl
www.utrecht.nl
Dura Vermeer
Syntrus Achmea
Haarlemmermeer
Zaandam
Ronald Dielwart
Erik van der Struijs
Jeroen van der Ven
Alwin Westerbeek
r.dielwart@duravermeer.nl
eric.van.der.struijs@achmeavastgoed.nl
Jeroen.van.der.ven@haarlemermeer.nl
a.westerbeek@zaanstad.nl
www.duravermeer.nl
www.syntrusachmeavastgoed.nl
www.hlmrmeer.nl
www.zaanstad.nl
G&S Vastgoed
Van Wijnen Groep
Lelystad
Zuidas
Jet Happel
Joost van Kimmenaede
Carolien Gase
Frederijk Haentjens
j.happel@gensvastgoed.nl
j.van.kimmenaede@vanwijnen.nl
cm.gase@lelystad.nl
fhs@zuidas.nl
www.gensvastgoed.nl
www.vanwijnen.nl
www.lelystad.nl
www.amsterdam.nl/zuidas/english
Zaandam
Special report for the Dutch G4 cities produced by PropertyEU