Cushman & Wakefield MarketBeat reports analyse quarterly Netherlands commercial property activity across office, retail and industrial real estate sectors including supply, demand and pricing trends at the market and submarket levels.
During the entire first quarter of 2021 non-essential stores were closed, contact professions were not allowed to be exercised and there was a curfew from 9 p.m. Because economy and society are better prepared for the consequences of the limited freedoms, its impact on economic growth turns out to be less severe than initially anticipated. The Bureau for Economic Policy Analysis (CPB) has set the economic contraction of the Dutch economy at 3.7% for 2020.
The office market accounted for approximately 32% of the total investment volume of the first quarter of 2021. This brings the investment volume to EUR 472 million, a decrease of 65% compared to the same - largely pre-corona - period previous year. On the occupier side, 205,800 square meter of office space was taken into use in the first quarter of 2021. Compared to the same period in 2020, this is a decrease of 18%. Many office occupiers who had put their expansion or relocation process on hold in 2020, will start this again slowly in 2021 in view of the weakening Corona crisis during the second half of this year.
Largely as a result of the mandatory closing of non-essential shops throughout the first quarter, retail market investment activity almost came to a complete standstill with an investment volume of just EUR 100 mln representing a modest 6% of total volume. Many transactions were put on hold due to uncertainty among investors about the magnitude of the economic repercussions and the impact on real estate. In the retail market, stakeholders pre-COVID were already looking for a "New Normal", knowing that the offline retail market is undergoing major structural changes as a result of the advent of alternative information and sales channels. COVID-19 has accelerated and visualized these slow structural changes.
In the first quarter of 2021, EUR 367 million was invested in the industrial and logistics submarket, which represent a share of 25% of the total investment volume, while on the occupier side around 625.500 square meter of industrial and logistics space was taken into use. Because the first quarter of 2020 registered a take-up of 625.100 square meter, it means that the take-up of industrial and logistics space remained more or less the same. The share of newly constructed buildings is expected to increase again in 2021, partly due to the scarcity of high-quality existing properties.
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