Demand for commercial property in the Netherlands is being fuelled by a shortage of new stock, rising rents and a strong domestic economy, Savills has said.
The agency's Market in Minutes study of Q1 2019 said the 'buy signal' in the Dutch market is strong because of the triple-A rated economy and real estate remaining a stable choice as part of a mixed investment portfolio.
However, restrictive planning policies by municipal governments are holding back development and driving rents upwards, Savills warned. Restrictions on permits for new developments often result in unprofitable projects and mean fewer developments get off the ground. Rising land prices and construction costs are also deterring developers, Savills said.
Jordy Kleemans, head of research and consultancy at Savills in the Netherlands, said: 'Shortage of building plots not only applies to ‘obvious’ locations in or close to cities but also for example to the logistics hotspots, for which land is becoming scarce.
'In Venlo, for example, suitable land for new logistics developments has already decreased by 57% in less than three years. A sector in which land availability has never been a problem before is now facing rental growth.'
Dutch landowners and municipalities have made moves in recent months to free up more space for development to address the problem. Amsterdam has announced it intends to loosen its restrictions on office development, while state-owned rail operator NS is in talks with the four largest cities about potential developments above train stations and railway lines.
Last December Utrecht gave the go-ahead to the MARK project, a development of three apartment buildings of up to 140 metres, breaching a centuries-long unwritten rule that no building could be taller than the city's cathedral tower.