RESIDENTIAL MARKET IN THE NETHERLANDS. A Cushman & Wakefield Publication

Transcription

1 MARKET IN THE A Cushman & Wakefield Publication 2015

2 A Cushman & Wakefield Research Publication TABLE OF CONTENTS INTRODUCTION Page 2 OUTLOOK: A VISION FOR THE MARKET Page 4 TRENDS Page 8 INSIGHT: THE DUTCH INVESTMENT MARKET Page 12 INSIGHT: THE DUTCH MARKET Page 16 ECONOMIC BACKGROUND Page 28 DEMOGRAPHIC BACKGROUND Page 31 CUSHMAN & WAKEFIELD CONTACTS Page 34 COPIES More copies of this publication are obtainable from: Cushman & Wakefield V.O.F. Strawinskylaan ZX Amsterdam - The Nerlands research.amsterdam@eur.cushwake.com CUSHMAN & WAKEFIELD 1 1

3 INTRODUCTION Residential market in Nerlands report INTRODUCTION INTRODUCTION FOREWORD Residential market in Nerlands report Residential market in Nerlands report Cushman & Wakefield is pleased to present its latest report: Residential Market in Nerlands. FOREWORD The Dutch residential market has become a prime target for both domestic and international investors during recent years and as a consequence Cushman & Wakefield has compiled this report to clarify Cushman relevant information & Wakefield on is this pleased market to present for its clients. its latest The report: report Residential brings our view Market of in future Nerlands. of market as well as main trends that we see in today s market place, also we provide main characteristics of residential market. The report outlines both residential occupier and investor The market, Dutch trends residential as well market as highlighting has become aspects a prime of target legislation for both concerning domestic for and residential international space. investors during recent years and as a consequence Cushman & Wakefield has compiled this report to clarify relevant information on this market for its clients. The report brings our view of future of Cushman market as & well Wakefield as main is a well-known trends that we international see in today s real estate market advisory place, also firm we in provide Nerlands main and has been characteristics for over 40 of years. residential We have market. a dedicated The report residential outlines advisory both team residential that includes occupier Capital and Markets investor market, specialists trends who as are well pleased as highlighting to advise on aspects acquisition of legislation and/or concerning disposal of for residential residential properties space. or portfolios, as well as Valuation & Advisory specialists having broad experience in valuing both single residential properties and residential portfolios. They have a proven track record when it comes to Cushman valuing for & both Wakefield domestic is a and well-known international international clients. Lastly, real estate our Research advisory department firm in Nerlands continuously and has monitors been for over Dutch 40 years. residential We have market a dedicated and developments residential advisory that may team influence that includes market Capital dynamics Markets and trends. specialists Our who Research are pleased team to is also advise able on to strategically acquisition advise and/or governments, disposal of residential municipalities properties and investors portfolios, on market as structure well as in Valuation any particular & Advisory geographical specialists location. having broad experience in valuing both single residential properties and residential portfolios. They have a proven track record when it comes to valuing for both domestic and international clients. Lastly, our Research department continuously monitors This report demonstrates Dutch residential only a market small part and of developments Cushman & that Wakefield s may influence knowledge market of dynamics residential and trends. market. Our Should Research you require team is any also furr able to information strategically or advise advice governments, we are more municipalities than happy to and assist. investors on market structure in any particular geographical location. On behalf of Cushman & Wakefield: This report demonstrates only a small part of Cushman & Wakefield s knowledge of residential market. Should you require any furr information or advice we are more than happy to assist. On behalf of Cushman & Wakefield: Justin de Gier MRICS RT RMT Partner - Capital Markets mr. Martijn Onderstal MSRE MRICS RRV RT Associate - Valuation & Advisory Justin de Gier MRICS RT RMT Partner - Capital Markets mr. Martijn Onderstal MSRE MRICS RRV RT Associate - Valuation & Advisory 2 2

4 A Cushman & Wakefield Research Publication OUTLOOK: A VISION FOR THE MARKET 3 CUSHMAN & WAKEFIELD 3

5 OUTLOOK A vision for residential market MARKET IN THE SHORT - MEDIUM TERM OUTLOOK The changed legislation in Nerlands combined with changed financing landscape and perceived safe haven residential investments are, have resulted in an enormous pressure on Dutch residential investment market. However, in short term we foresee this process to slow down to normal proportions. Although legislation changes will not be made undone, risen price levels have substantially been driven by historically low interest rates. However, with foreseen upward pressure on interest rates it is likely that current gap between interest and return will decrease which may put investor interest back at a normalized level. Indeed, for this year we foresee investment volumes to decrease in comparison to last year whereas in 2016 and 2017 investment volumes are likely to return to a normalized level of some 1.3 to 1.5 billion per annum. CHART: OUTLOOK FOR INVESTMENTS Millions For medium term we expect that investment market will be driven by strategic considerations which is in contrast to current, financially driven, market. Strategic stock management will inevitably lead to a solid level of annual investments. Although this will firstly result in changes in disposals of current stock from different types of parties in market, we do expect that parties who are currently active in market may start disposing ir non-strategic assets in medium term as well. Because it is foreseen that capital values will rise in economically dominant regions in Nerlands it may be attractive to benefit from market cycle by disposing well located properties in medium term. Demographics on or hand will increasingly impact residential market in medium term. The first regions will see shifts in population- and household figures that lead to a changing demand for residential space in medium term. Although population figures may regionally already decrease, majority of regions is foreseen to witness an increase in number of households. The main impact of this is that average household size will decrease across country, leading to an increasing appetite of consumers for one- or two-person premises whereas demand for large premises will become under pressure. CUSHMAN & WAKEFIELD 4 4

6 A Cushman & Wakefield Research Publication 5 Amsterdam, Camelot Campus

7 OUTLOOK A vision for residential market MARKET IN THE LONG TERM OUTLOOK For long term it is expected that residential investment market will remain one of most solid investment classes. Activity is foreseen to average at some billion per annum in long term, with strategically managed portfolios dominating residential investment sector. This is expected from various kinds of investors, ranging from housing associations to capital investors. However, as investment market is strongly linked to macro economy it cannot be ruled out that differences will exist from year to year. Indeed, as witnessed in recent years macro economic influences have had a transforming impact on residential investment market. Geo-political uncertainties seem to increasingly affect macro economics across globe and thus will inevitably impact Dutch market too. Although we do not foresee residential investment market to be as volatile as usual economic cycles, it is a fact that macro economic trends will impact residential investment market to a greater or lesser extent. Future proof investors will focus on properties that have been developed for an efficient operation. Justin de Gier - Partner Capital Markets Cushman & Wakefield Regarding demographic developments, long term will prove strong regional differences in population landscape of country. With decreasing population impacting peripheral provinces, increasing appetite of especially working population and a major share of elderly to live in urban regions will surely be visible. Whilst demand for se urban regions will be buoyed throughout years, available space will be tightened from year to year. However, changing ways in which especially younger people make use of space and goods may come exactly on time. The tightening of available space seems to be leading to a greater shortage of residential space in urban regions but changing behavior of youngsters is most likely to lead to a new sort of space usage. Efficiency is key in future which is probably going to influence size of premises for this group. While we already see that premises of sq.m are occupied it is nowadays more financially driven in order to retain occupancy costs at an acceptable level than it will be in future. Indeed, living nearby facilities in vibrant, urban, areas will be more important than size of premise. As a result, new developments and transformational projects in urban areas have a significant potential to focus on relatively small premises. This new type of residential space is likely to range in rental prices from 500 to 900 per month. Although this results in a higher average rental price per square metre, we foresee that growing wealth of high educated youngsters combined with ir increasing appetite for flexibility will lead to a level of acceptance among this group. CUSHMAN & WAKEFIELD 6 6

8 A Cushman & Wakefield Research Publication TRENDS 7 CUSHMAN & WAKEFIELD 7

9 TRENDS MARKET IN IN THE MARKET IN DEMOGRAPHICS AND CHANGING CONSUMER PROFILES DEMOGRAPHICS AND CHANGING CONSUMER PROFILES The Nerlands currently stands on brink of significant shift in its demographic profile. Over The Nerlands currently stands on brink of a significant shift in its demographic profile. Over next ten to twenty years major share of population will retire whereas number of young next ten to twenty years a major share of population will retire whereas number of young persons in country will increasingly be limited. As result, certain pressure on its social system is persons in country will increasingly be limited. As a result, a certain pressure on its social system is not unlikely and thus structure of housing market may change drastically over next twenty not unlikely and thus structure of housing market may change drastically over next twenty years. However, besides demographic shift, demand is also shifting. While it is already visible that an years. However, besides demographic shift, demand is also shifting. While it is already visible that an increasing share of Dutch population prefers urban regions above country sides for ir place to increasing share of Dutch population prefers urban regions above country sides for ir place to reside, this trend will continue over next years. Neverless, this trend is dominated by relatively reside, this trend will continue over next years. Neverless, this trend is dominated by relatively young persons as well as by older inhabitants of country. contrary trend is visible for young persons as well as by older inhabitants of country. A contrary trend is visible for middle class with children. Although this group also seems to be favouring economically dominant middle class with children. Although this group also seems to be favouring economically dominant regions in country for labour- and facility benefits, living in relatively small premise in vibrant regions in country for labour- and facility benefits, living in a relatively small premise in a vibrant city centre is not on top of ir list of demands. Moreover, this group is increasingly seeking singlefamily houses in vicinity of cities but outside largest cities. city centre is not on top of ir list of demands. Moreover, this group is increasingly seeking singlefamily houses in vicinity of cities but outside largest cities. Besides aforementioned trends, that are mostly driven by demographical shifts, various or Besides aforementioned trends, that are mostly driven by demographical shifts, various or factors are influencing consumer behaviour. trend that is foreseen to impact on behaviour is factors are influencing consumer behaviour. A trend that is foreseen to impact on behaviour is so-called sharing community in which consumers value ownership less strongly than y do today. so-called sharing community in which consumers value ownership less strongly than y do today. While this has already been evidenced in urban regions in Nerlands where for example While this has already been evidenced in urban regions in Nerlands where for example ownership of cars under young people has decreased drastically, this may as well become visible in or ownership of cars under young people has decreased drastically, this may as well become visible in or sectors in next years. This may lead to different demand for space since youngsters will increasingly sectors in next years. This may lead to a different demand for space since youngsters will increasingly use public space instead of ir premise as ir social playground. Effectively this is likely to lead to use public space instead of ir premise as ir social playground. Effectively this is likely to lead to a change in demand for residential space, with premises for young persons eventually being smaller than change in demand for residential space, with premises for young persons eventually being smaller than premises we see today. premises we see today. HOUSING ASSOCIATIONS HOUSING ASSOCIATIONS Changing regulations and shifts in level playing field of housing associations are set to cause some Changing regulations and shifts in level playing field of housing associations are set to cause some remarkable changes in housing association sector. Being forced by national government to focus remarkable changes in housing association sector. Being forced by national government to focus on its core tasks within specified region, sector professionalized rapidly. Terms such as strategic on its core tasks within a specified region, sector professionalized rapidly. Terms such as strategic stock management, asset management and steering of market values nowadays being adapted by stock management, asset management and steering of market values nowadays being adapted by employees of housing associations. Moreover, Amsterdam School of Real Estate has even dedicated employees of housing associations. Moreover, Amsterdam School of Real Estate has even dedicated special course to housing associations. This course, asset management for housing associations, has a special course to housing associations. This course, asset management for housing associations, has specifically been introduced as result of ongoing professionalization of sector. Next to this specifically been introduced as a result of ongoing professionalization of sector. Next to this course, an association for housing association asset managers was established quite recently as well. course, an association for housing association asset managers was established quite recently as well. These developments indicate an increasing professionalization in sector. These developments indicate an increasing professionalization in sector. Moreover, hold/sell analysis nowadays are an everyday topic for housing associations and as result Moreover, hold/sell analysis nowadays are an everyday topic for housing associations and as a result gap with institutional investors is closing rapidly. With an increasing number of vacancies at housing gap with institutional investors is closing rapidly. With an increasing number of vacancies at housing associations focusing on asset management functions, housing associations are increasingly becoming associations focusing on asset management functions, housing associations are increasingly becoming competition for institutional investors in labour market. competition for institutional investors in labour market. furr professionalization of real estate market was already witnessed over past years and A furr professionalization of real estate market was already witnessed over past years and with housing associations following this trend we believe it to be positive for general real estate and with housing associations following this trend we believe it to be positive for general real estate and residential market. We believe this professionalization will help positioning of housing associations in residential market. We believe this professionalization will help positioning of housing associations in changing and more international landscape of Dutch housing- and real estate market. Housing changing and more international landscape of Dutch housing- and real estate market. Housing associations will benefit from ir growing professional attitude which will help m improving ir associations will benefit from ir growing professional attitude which will help m improving ir strategic stock management and achieving ir internal goals. This will logically involve professional strategic stock management and achieving ir internal goals. This will logically involve a professional acquisition- and disposition plan. acquisition- and disposition plan. CUSHMAN & WAKEFIELD 8 CUSHMAN & WAKEFIELD 8 8

10 A Cushman & Wakefield Research Publication Rising interest rates will bring a Rising new balance interest into rates will playing bringfield a new for residential balance into investments. playing field for residential investments. Martijn Onderstal- Associate Valuation & Advisory Cushman & Wakefield Martijn Onderstal- Associate Valuation & Advisory Cushman & Wakefield Breda, Vredenberg 9 Breda, Vredenberg

11 TRENDS MARKET IN THE INVESTMENT MARKET The investment market for commercial real estate in Nerlands was historically dominated by office- and retail sector. However, over past years residential properties have witnessed an increased appetite from investors leading to higher investment volumes than a decade ago. Investors n mostly focused on long-term exploitation of (relatively) new residential properties. After an operation period of 15 to 30 years institutional investors generally chose to dispose of ir portfolio to private investors who n continued operation which eventually led to individual disposals of individual residences in portfolio. Especially single family premises and apartments seemed to be of interest to investors since majority of portfolios consisted of se properties. Although aforementioned practice is still applicable to a major share of parties being active in today s residential investment market, landscape has been changing over past years. Indeed, with market domination from private investors and (domestic) institutional funds being common practice in past, international investors entered Dutch residential investment market a few years ago. Driven by favourably priced residential portfolios, changing legislation for commercial investors to invest in social housing and proven track record of Dutch residential market as a safe haven for investors, appetite for residential portfolios has been robust since market entrance of se international investors. Gaining more insight in available portfolios y also recognized a potential to optimize occupancy of various residential portfolios. This potential offers investors opportunity to enhance future value of premises even furr. Besides optimizing occupancy of portfolios, re is also potential in optimization of rents. Since Dutch government decided that rental levels for social houses occupied by people with a high income can increase by more than CPI, re is a huge potential for this optimization. Indeed, on average some 25% - 30% of social housing stock in country is occupied by households with a relatively high income (above 34,911 at present). Depending on level of income, landlords are permitted to increase rents by 3% or 5% in Foreign parties have been led by unstability of Dutch residential market. With interest hitting historically low rates and an increasing liquidity in real estate financing market it has become cheaper and easier than ever to acquire Dutch residential space. This has led to an increased willingness of investors to invest against higher price levels than in past. While it was common practice to acquire an occupied portfolio at 70% - 80% of vacant possession value, due to lower vacant possession values this has risen up to almost 100%. Although it may be possible to transact at se price levels given current state of financing market and interest rates, we foresee this to shift over next 12 to 18 months. Interest rates are expected to rise in this period. Therefore returns can only achieved by individual sell offs. The recovering owner-occupier market will make selling off in single units more important than it has been over past years. We expect a divergence in active parties: institutional investors on one hand, who are looking for stable returns on long-term and private investors on or hand who are also seeking indirect returns through individual sales, supported by increasing housing prices. Also, distressed sellers are not drivers of residential investment market anymore. A market without such stress will result in lower activity of foreign private equity, lower investment volumes and a more normalized investor appetite. Indeed, Dutch institutional investors have already shown some activity over past months. Due to lack of supply of new developments, which y preferably target, it is likely that institutional investors will expand ir activities in existing stock. Long-term operation will again be leading phrase for residential investors with individual sell offs surely becoming interesting for private investors. Encouraged by strengning of owner-occupier market, this will undeniably lead to a new balance on Dutch residential investment market. CUSHMAN & WAKEFIELD 10 10

12 A Cushman & Wakefield Research Publication INSIGHT: THE DUTCH INVESTMENT MARKET 11 CUSHMAN & WAKEFIELD 11

13 INVESTMENT INVESTMENT MARKET MARKET MARKET IN IN THE MARKET IN GENERAL Chart: Historical residential investment volumes in GENERAL Chart: The Nerlands Historical residential investment volumes in The Nerlands The domestic investment market for The residential domestic space investment has historically market been for residential dominated space by domestic has historically investors. been As a dominated result, investment by domestic volumes investors. were As a result, relatively investment low volumes past and were when relatively compared low to or in sectors past and when compared residential to investment or sectors volume was a residential limited contributor investment to volume overall trading was a limited volumes. contributor However, to since overall economic trading volumes. crisis in 2007/2008 However, since amount economic of capital crisis invested 2007/2008 into residential amount sector of capital 500 invested picked-up into and residential share of sector sector 500 picked-up rose rapidly, and whereas share of more sector 0 rose traditional rapidly, investment whereas classes more saw a drop traditional in volumes. investment classes saw a drop in Furrmore, volumes. with domestic regulations changing it is now becoming easier for commercial investors Furrmore, to invest in social with housing domestic portfolios regulations and changing while domestic it is now investors becoming have easier always for been commercial prominent investors as to mentioned invest in above, social housing international portfolios investors and while are showing domestic an investors increasing have and always significant been appetite prominent for Dutch as mentioned residential. above, Indeed, international buoyed by investors low interest are showing rates and increasing regulatory and changes significant investment appetite for volume Dutch for residential. space Indeed, doubled buoyed in by 2014 low when interest compared rates to and 2013 regulatory and preceding changes years. investment The low interest volume rate for residential environment space and doubled high levels in 2014 of international when compared capital to have, 2013 so and far, preceding 2015 continued years. The to low support interest investor rate environment appetite for residential and high levels product, of international indicating that capital today s have, market so far, may in 2015 be typified continued as a to bull support market. investor The appetite largest transaction for residential that product, has closed indicating so far in that 2015 today s is market 365 million may be investment typified as made a bull by market. Round The Hill largest Capital transaction when y acquired that has closed WIF so portfolio. far in 2015 The is deal 365 was million announced investment 2014 made but official by Round approval Hill Capital was only when given y in Q1 acquired The WIF conclusion portfolio. of this The deal, along was announced with part of in CBRE 2014 but Global official Investor approval was portfolio only given as well in as Q Staalbank The conclusion Portfolio in of this first deal, quarter along with furr part emphasized of CBRE Global Round Investor Hill Capital as portfolio one of as most well as active Staalbank investors in Portfolio residential in first sector. quarter As a furr result of emphasized limited supply Round pricing Hill Capital seems to as one be tightening of most in active current investors market in and residential this trend sector. is expected As a to result continue of limited as 2015 supply progresses. pricing seems to be tightening in current market and this trend is expected to continue as 2015 progresses. Millions Millions TABLE: NOTABLE INVESTMENT TRANSACTIONS IN 2014 AND 2015 TABLE: NOTABLE INVESTMENT TRANSACTIONS IN 2014 AND 2015 YEAR INVESTOR VOLUME # OF PREMISES VENDOR YEAR INVESTOR VOLUME # OF PREMISES VENDOR 2014 Patrizia Immobilien 448 mn 4,157 Vestia 2014 Patrizia Immobilien 448 mn 4,157 Vestia 2015 Round Hill Capital 365 mn 3,786 WIF 2015 Round Hill Capital 365 mn 3,786 WIF 2014 Round Hill Capital 180 mn 1,543 CBRE Global Investors 2014 Round Hill Capital 180 mn 1,543 CBRE Global Investors 2014 Aventicum Capital 100 mn 723 Bouwinvest REIM 2014 Aventicum Capital 100 mn 723 Bouwinvest REIM 2014 Quadrigo 90 mn 990 BPFD 2014 Quadrigo 90 mn 990 BPFD 2014 Round Hill Capital 89 mn 976 Propertize 2014 Round Hill Capital 89 mn 976 Propertize 2014 Cofinimmo 72 mn - GREEN Real Estate 2014 Cofinimmo 72 mn - GREEN Real Estate 2014 Bouwinvest REIM 61 mn 143 Pinnacle 2014 Bouwinvest REIM 61 mn 143 Pinnacle 2014 City Living 60 mn 571 Boelens de Gruyter 2014 City Living 60 mn 571 Boelens de Gruyter 2014 Bouwfonds REIM 60 mn Bouwfonds REIM 60 mn - - Source: Cushman & Wakefield Research based on RCA, PropertyNL and VGM Source: Cushman & Wakefield Research based on RCA, PropertyNL and VGM CUSHMAN & WAKEFIELD 12 CUSHMAN & WAKEFIELD 12 12

14 INVESTMENT MARKET INVESTMENT MARKET A Cushman & Wakefield Research Publication INVESTOR PROFILES INVESTOR PROFILES The most active investors in sector The were most those active known investors for developing, sector were owning those and known operating for real developing, estate. Among owning this investor and operating pool social real housing estate. Among this institutions investor accounted pool social for housing a large institutions proportions accounted and have shown for a large significant proportions levels of activity and in have terms shown of numbers. significant levels Turing of attention activity in to terms investment of numbers. volumes Turing social housing attention investors investment are significantly volumes social behind housing investment investors managers are significantly who behind acquired investment more than managers 1.6 billion who worth of acquired residential more space than in 1.6 Nerlands billion worth in of residential 2014 and 2015 space combined. Nerlands Round Hill in 2014 Capital and and 2015 Patrizia combined. Immobilien Round were Hill Capital main investors and Patrizia making Immobilien most were main significant investors contribution making in this most sub sector significant of investors. contribution Equity funds in this round sub out sector of top investors. three spots, Equity investing funds round nearly out 300 top million three in residential spots, investing real estate nearly over 300 million past two in years. residential real estate over past two years. ACTIVE VENDORS ACTIVE VENDORS Activity in investment market was Activity partly buoyed in investment by changed market regulation was partly for social buoyed housing by institutions changed regulation who were, for under social certain housing circumstances, institutions allowed who were, to under sell properties certain circumstances, in ir portfolios allowed to to sell commercial properties investors. ir portfolios Over past to two commercial years this has investors. led public Over institutions past two years (social this housing has led institutions to public institutions and related (social institutions) housing being institutions most and active related sellers institutions) terms of volume. being Nine most of active se sellers public institutions terms of volume. accounted Nine for of over se 50% public of institutions activity accounted on sell-side for over of deals 50% of recorded. activity Anor on sell-side important of deals group of recorded. vendors was Anor developer important group with of vendors eight companies was in developer total accounting group for with eight an investment companies volume in total of accounting over 250 for an million. investment Furrmore, volume domestic of over 250 million. institutional Furrmore, investors domestic such as insurers, institutional pension funds investors and investment such as insurers, managers pension were active funds vendors and investment over managers past 12 - were 18 months active as vendors well. Among over ors, past 12 CBRE - 18 Global months Investors, as well. Amvest, Among ASR, ors, CBRE Global Bouwinvest Investors, REIM Amvest, and Delta ASR, Lloyd Bouwinvest disposed of REIM parts of and ir Delta residential Lloyd disposed portfolios. of parts of ir residential portfolios. 13 Chart: Historical residential investment volumes in Chart: The Nerlands Historical residential investment volumes in The Nerlands Acquisition volume (in mn) Number of investors 25 Acquisition volume (in mn) Number of investors Source: Cushman & Wakefield Research based on RCA Source: Cushman & Wakefield Research based on RCA TABLE: MOST ACTIVE INVESTORS AND VENDORS IN TABLE: THE MARKET MOST ACTIVE INVESTORS AND VENDORS IN THE MARKET INVESTORS VENDORS INVESTORS VENDORS NAME VOLUME NAME VOLUME NAME VOLUME NAME VOLUME Round Hill 733 mn Vestia 1,025 mn Round CapitalHill 733 mn Vestia 1,025 mn Capital Patrizia 448 mn WIF 430 mn Patrizia Immobilien 448 mn WIF 430 mn Immobilien Woonstad CBRE Global 340 mn 244 mn Woonstad Rotterdam CBRE Investors Global 340 mn 244 mn Rotterdam Bouwinvest Investors 293 mn Amvest 130 mn Bouwinvest REIM 293 mn Amvest 130 mn REIM Bouwinvest Rondom Wonen 137 mn 113 mn Bouwinvest REIM Rondom Wonen 137 mn 113 mn REIM OCP 98 mn BPFD 95 mn OCP 98 mn BPFD 95 mn Quadrigo 95 mn Provast 92 mn Quadrigo 95 mn Provast 92 mn Aventicum 89 mn Propertize 89 mn Aventicum 89 mn Propertize 89 mn Heitman 77 mn Mooiland 67 mn Heitman 77 mn Mooiland 67 mn Source: Cushman & Wakefield Research based on RCA Source: Cushman & Wakefield Research based on RCA CUSHMAN & WAKEFIELD 13 CUSHMAN & WAKEFIELD 13

15 INVESTMENT MARKET INVESTMENT MARKET MARKET IN THE MARKET IN LEGISLATIVE ISSUES LEGISLATIVE ISSUES One of key factors influencing market over past 24 months has been loosening of legislation for housing associations allowing m now to dispose of parts of ir portfolios to investors One of key factors influencing market over past 24 months has been loosening of and since legislation came into force housing associations have shown significant appetite to put part legislation for housing associations allowing m now to dispose of parts of ir portfolios to investors of ir portfolios up for sale. There has also been activity on buy-side of market from housing and since legislation came into force housing associations have shown significant appetite to put part associations which is generally result of a more efficient process allowing housing associations to sell of ir portfolios up for sale. There has also been activity on buy-side of market from housing to each or and thus creating churn in market. associations which is generally result of a more efficient process allowing housing associations to sell to The each following or and overview thus creating summarizes churn in main market. regulations. The following overview summarizes main regulations. 1. DISPOSAL TO 1. NATURAL PERSON DISPOSAL TO Approval from NATURAL PERSON minister is not Approval from required if minister is not salesvalue is at 90% required if or above value salesvalue is at 90% of vacant or above value possession. of vacant Occupancy by possession. related family = Occupancy by related occupation related family = If sold below 90% of related occupation value of vacant If sold below 90% of possession value of vacant permission still is possession not necessary, permission still is following conditions not necessary, do however come following conditions into force: do however come 1. Mandatory payback of granted into force: 1. Mandatory payback of granted discounts if resold within 10 discounts if years resold within Mandatory split years of profit that was 2. Mandatory split made on sale of profit that was if sold within 10 made on sale years and annual if sold within 10 income is higher years and annual than 38,000 per income is higher annum. than 38,000 per annum. 2. DISPOSAL TO THIRD PARTIES 2. DISPOSAL General TO conditions: THIRD PARTIES 1. Approval from minister required General conditions: 2. Reporting requirement for intended disposals Approval from minister required Intended disposal to or housing association does not need to be reported Reporting requirement for intended disposals Next to general conditions also specific conditions for social housing and private rental sector housing Intended disposal to or housing association does not need to be reported Public process required (3 week term) Next to general conditions also specific conditions for social housing and private rental sector housing Certificate of conduct of buyer is required 5. Public process required (3 week term) 6. Certificate of conduct of buyer is required SOCIAL HOUSING PRIVATE SECTOR SOCIAL HOUSING PRIVATE SECTOR Mandatory to offer premise to current tenant at value of Market value is allowed vacant possission at a 4 week term Mandatory to offer premise to current tenant at value of Minister decides if only few tenants are willing to buy ir house vs. a Market Minister value approves is allowed transactions of market vacant possission at a 4 week term third party that only wants to acquire entire complex value or higher Minister decides if only few tenants are willing to buy ir house vs. a Minister approves transactions of market If tenants show no interest, portfolio should at least be offered to WIF Market value is generally below 90% of third party that only wants to acquire entire complex value or higher and approved institution that covers geographical area value of vacant posession If tenants show no interest, portfolio should at least be offered to WIF Market value is generally below 90% of Housing association should refore ask and Tendering, approved if public, institution is permitted that covers geographical area value of vacant posession approval from minister prior to sale Housing association should refore ask Tendering, If sold when if let: public, mandatory is permitted for investor to sign a statement of social approval Valuation from of vacant minister possession prior to OR sale value letting behaviour If sold when let: mandatory for investor to sign a statement of social for immovable property act must be Valuation of vacant possession OR value letting Motivation behaviour of disposal to third party is required from housing association indicated to minister for immovable property act must be Motivation of disposal to third party is required from housing association indicated to minister Vacant premises to be sold at a maximum discount of 10% of value Exemption if sold at market value is generally of vacant possession Vacant premises to be sold at a maximum discount of 10% of value granted Exemption if sold at market value is generally of vacant possession granted Let premises may be sold at a 25% discount If different from above, approval from If different from minister is required. above, approval from minister is required. Let If discount premises may greater be sold than at 25%, a 25% discount investor is obliged to operate portfolio for at least 7 more years whereas profit sharing is obliged until If discount is greater than 25%, investor is obliged to operate 30 years after acquisition portfolio for at least 7 more years whereas profit sharing is obliged until Sale of social housing must include municipalities opinion and tenants 30 years after acquisition have to be positive about it Sale of social housing must include municipalities opinion and tenants have to be positive about it Municipal approval is required Municipal approval is required CUSHMAN & WAKEFIELD 14 CUSHMAN & WAKEFIELD 14

16 A Cushman & Wakefield Research Publication INSIGHT: THE DUTCH MARKET 15 CUSHMAN & WAKEFIELD 15

17 THE DUTCH MARKET THE DUTCH MARKET MARKET IN MARKET IN INTRODUCTION INTRODUCTION The Nerlands is divided into twelve provinces. The Dutch residential market, in figures, will be The illustrated Nerlands by displaying divided into main twelve characteristics provinces. of The Dutch residential residential sector market, in each province figures, leading will be to a illustrated clear overview by displaying of regional main residential characteristics markets of in residential Nerlands sector and in will each uncover province which leading areas to of a clear country overview will have of to consider regional residential impacts markets of a declining consumer Nerlands landscape, will and uncover those which areas areas forecast of to country see an increase will have in to consider number of residents impacts of and a declining households. consumer landscape, and those areas forecast to see an increase in number of residents and households. MAP: DEVELOPMENT OF THE NUMBER OF HOUSEHOLDS PER PROVINCE MAP: DEVELOPMENT OF THE NUMBER OF HOUSEHOLDS PER PROVINCE Number of households x 1,000 Number of households x 1,000 Source: Cushman & Wakefield Research based on CBS and PBL Source: Cushman & Wakefield Research based on CBS and PBL CUSHMAN & WAKEFIELD 16 CUSHMAN & WAKEFIELD 16 16

18 TRANSFO THE WAY TH WORKS, SH LIV A Cushman & Wakefield Research Publication 17

19 RMING E WORLD OPS AND ES 18

20 A Cushman & Wakefield Research Publication DRENTHE Dren is a relatively small province, located to south of Groningen province. With a stock of 218,390 premises province is ranked tenth in Nerlands against this metric. With an average 2.24 inhabitants per unit province however, ranks sixth in country for number of inhabitants per unit. The owner occupier rate in Dren is almost 65% which is nearly 10% above country average. According to national statistics some 51,400 premises are owned by housing associations. Nearly 25% of se are occupied by inhabitants with an income of over 40,000 per annum which is higher than permitted maximum for residents of social housing. The average value of residential properties in Dren has increased drastically since However, increase of 150% is less significant than in most or provinces in country. The decrease compared to its peak value in 2010 however, has been more substantial than average in country. The average value of 188,000 is 12.6% below its 2010 level of 215,000. TABLE: MAIN POPULATION FORECAST FOR DRENTHE INHABITANTS MAJOR MUNICIPALITIES Emmen Assen Hoogeveen , , , ,400 68,500 69,100 70,900 72,300 54,300 54,000 52,900 52,700 FLEVOLAND Flevoland is a relatively small province located in centre of country and was reclaimed in early to mid s. Its residential stock of 162,730 premises is currently smallest in country, whereas average number of inhabitants is highest of country. With nearly 400,000 inhabitants province houses, on average, 2.46 residents per unit which is 0.24 above national average. The owner occupier rate in Flevoland is relatively high at almost 64%: 8% above country average. According to national statistics some 41,800 premises are owned by housing associations in province, of which nearly 30% are occupied by inhabitants with an income of 40,000 or above. This is in line with national average but indicates that a major share of residents living in social houses occupy premises to which y are not entitled to due to ir income levels. The average property value of residential space in Flevoland is 182,000. Compared to 2000, average value increased by 104,000, although when looking at 2010, property values have come down by some 10.3%. TABLE: MAIN POPULATION FORECAST FOR FLEVOLAND INHABITANTS MAJOR MUNICIPALITIES Almere Lelystad Noordoostpolder , , , , ,900 81,800 83,500 46,600 46,800 45,700 44,500 CUSHMAN & WAKEFIELD 19 19

21 FRIESLAND Located in north of Nerlands, Friesland has eighth largest residential market of country with a total of 294,170 premises. With total population numbering 646,320 province ranks seventh in country in terms of number of inhabitants per unit. With 2.2 inhabitants on average per unit average for province of Friesland stands just below national average of The owner occupier rate in Friesland is approximately 60% which is some 5% over country average. According to national statistics bureau around 80,000 premises are owned by housing associations in Friesland. Nearly 17,500 of se are occupied by inhabitants with an income of over 40,000 per annum which is higher than permitted maximum for residents of social housing. The average value of residential properties in Friesland has increased significantly since However, after peaking in 2010 values have since shown a marked decrease. While increase between 2000 and 2010 totaled 228%, decrease over past four years was 14.2%. Although this drop is significant it still results in an overall increase in property values of over 180% compared to TABLE: MAIN POPULATION FORECAST FOR FRIESLAND INHABITANTS MAJOR MUNICIPALITIES Leeuwarden Súdwest-Fryslân Smallingerland ,800 97, , ,100 82,500 82,800 83,100 77,200 55,500 55,400 55,400 56,000 GELDERLAND Gelderland, located to east of country, is largest province in country, although it only ranks fourth based on number of residential premises. The population is approximately 2.02 million inhabitants reflecting an average number of inhabitants of 2.3 per unit, which is slightly above national average. The owner occupier rate of 59.1% in Gelderland stands some 3% above national average. According to national statistics some 226,700 premises are owned by housing associations, of which just over 30% of se are occupied by inhabitants with an income of over 40,000 per annum and while this figure is relatively high, it is in line with national average. The average value of residential properties in Gelderland is 221,000 and while average value increased significantly between 2000 and 2010 by nearly 200%, it has decreased by 15% since n to its current value. However, this value is still 154% higher than average value in TABLE: MAIN POPULATION FORECAST FOR GELDERLAND INHABITANTS MAJOR MUNICIPALITIES Nijmegen Apeldoorn Arnhem , , , , , , , , , , , ,300 CUSHMAN & WAKEFIELD 20 20

22 A Cushman & Wakefield Research Publication GRONINGEN Located in north of Nerlands, Groningen has ninth largest residential market of country with 272,770 premises. Housing some 582,730 inhabitants province ranks tenth of country in number of inhabitants per unit with 2.14 inhabitants on average which is just below national average of This is driven by relatively high number of students living in city of Groningen and thus impacting average household size. In line with national average, owner occupier rate in Groningen is 56% and according to national statistics bureau some 76,000 premises are owned by housing associations. Over 20% of se houses are occupied by inhabitants with an income of over 40,000 per annum which is higher than permitted maximum for residents of social housing. The average residential property value in Groningen stands at 159,000, an increase of almost 170% compared to However, in comparison to 2010 average property value decreased by 11.7%. While this has macro-economic drivers, certain areas in province also suffer from earthquakes which has a negative impact on property values. TABLE: MAIN POPULATION FORECAST FOR GRONINGEN INHABITANTS MAJOR MUNICIPALITIES Groningen Oldambt Hoogezand-Sappemeer , , , ,500 38,400 37,500 36,200 35,500 34,800 34,400 34,200 34,100 LIMBURG Located in south east of country, Limburg province ranks sixth in terms of number of premises and seventh in terms of number of inhabitants. With 523,370 premises and 1.12 million inhabitants average occupancy per unit is 2.14 which is below national average and ranks province ninth in country. With an owner occupier ratio of 60.4% this inevitably leads to a smaller rental market. The social housing rental market accounts for some 28% of premises in province, whereas private rental sector accounts for just 11%. Of social housing located in Limburg approximately 23% is occupied by residents with an income of 40,000 or higher per annum. This percentage is amongst lowest of all provinces in country. The average value of residential properties in Limburg stands at 180,000 which is third lowest in country. The rise in property values since 2000 is least significant in Limburg, with values rising here by nearly 117% in comparison to When compared to 2010 values decreased by 12.6%. TABLE: MAIN POPULATION FORECAST FOR LIMBURG INHABITANTS MAJOR MUNICIPALITIES Maastricht Venlo Sittard-Geleen , , , , , ,200 97,800 93,400 93,100 92,400 86,500 76, CUSHMAN & WAKEFIELD 21

23 MARKET IN THE NOORD-BRABANT Noord-Brabant is largest province of south of Nerlands and third largest in terms of both number of premises and number of inhabitants. These total million and million respectively which puts average occupancy rate of a unit at 2.28 in Noord-Brabant - just above national average. The owner occupier rate in Noord-Brabant is 60.8% which is higher than national average. The social housing sector accounts for 28.8% of residential stock and private rental sector is smaller than national average. The share of occupiers of social houses with an income in excess of 40,000 per annum is relatively high at 24.6%, although is still below national average. Property values in Noord-Brabant for residential space have risen by nearly 170% compared to 2000 with current average value of 232,000 which is third highest in country. Compared to 2010 however, values have dropped by 14.4% with 2010 value standing at 271,000. In general, development of property values in Noord-Brabant shows a similar trend historically, although decline since 2010 has been stronger than in most or provinces. TABLE: MAIN POPULATION FORECAST FOR NOORD-BRABANT INHABITANTS MAJOR MUNICIPALITIES Eindhoven Tilburg Breda , , , , , , , , , , , ,400 NOORD-HOLLAND Noord-Holland has second largest residential stock in country with nearly 1.3 million premises. Its total number of inhabitants currently stands at 2.7 million which puts average occupancy rate per unit at This puts Noord-Holland in eleventh position in terms of occupier density, indicating that re is a relatively high number of one-person households in province. The owner occupier rate is significantly below average of country at 48.8%. This is mostly a result of a significant social housing sector in province as well as a larger than average private rental sector. The province totals approximately 410,000 social houses of which over 30% are occupied by inhabitants with an income of 40,000 or higher. This indicates that income of se inhabitants is too high for m to be considered for social housing according to official standards for Nerlands. The average value of a residential property in Noord-Holland is 235,000. Although increase of 193.8% compared to 2000 ( 80,000) is significant, values have fallen by 12.6% compared to The major cities in province however have witnessed a strong rebound in values in 2014 and TABLE: MAIN POPULATION FORECAST FOR NOORD-HOLLAND INHABITANTS MAJOR MUNICIPALITIES Amsterdam Haarlem Zaanstad , , , , , , , , , , , ,900 CUSHMAN & WAKEFIELD 22 22