Real estate investments up 44% in first half of 2024: CBRE

The real estate investment market in the Netherlands has recovered in the first six months of 2024 after reaching a historic low a year earlier. Investors invested 4.5 billion euros in real estate in the first half of this year, 44 percent more than a year earlier. They particularly pushed money into commercial real estate like hotels and retail properties, according to figures from the real estate organization CBRE.

The hotel sector was particularly interesting to realtors this year. Investments in hotels grew almost sixfold, from around 42 million euros in the first half of 2023 to 250 million euros in the first half of this year. The sector seems to have finally escaped from the aftermath of the coronavirus pandemic, CBRE said.

“It is clear that purchasing parties are once again convinced of the hotel product and are therefore willing to pay the price that selling parties have been charging for their hotel investments for some time. In fact, we now see - with a strong concentration in Rotterdam - that redevelopments of office space are also being initiated to meet the growing demand for hotel rooms.”

Retail properties also did well in the first half of this year, with investments in these properties increasing by 103 percent compared to a year earlier. Offices also saw an increase (+37 percent), but the investment volumes “lag significantly behind long-term averages.”

Investments in residential real estate grew by 71 percent to 1.4 billion euros in the first half of 2024. This amount, too, is still far below the pre-pandemic levels. The growth compared to the first half of last year is mainly due to a strong increase in investments in existing complexes (+177% to 646 million euros). Investment in new housing construction also grew, but more modestly at +28 percent.

“The increase in investment volume in new-build homes is positive given the tight private rental sector,” CBRE said, though it raised concerns that investors are buying up existing rentals to sell them as owner-occupied homes. “Because these homes will eventually disappear from the rental market – in addition to a significant wave of sales in the private investor market - the rental housing stock will become smaller in the coming years despite the new construction.” That will mean higher rent increases in the unregulated segment.