22-02-2024
“Looking ahead to 2024, we can take stock of the 2023 investment year”, writes Casper Hesp, director Investment Management in the new Investment Update. Last year was characterised by sharply rising interest rates and significant political, social and economic uncertainties, resulting in inflated property yields and investment volumes at their lowest levels for years. As a result, real estate portfolios were hit relatively hard, with average valuations falling by almost 9%. On the positive side, most of these revaluations took place in the first quarters and were limited by the end of 2023.
Signs of stabilisation are increasing, supported by lower inflation data in the fourth quarter and the absence of interest rate hikes by central banks. Financial markets are pricing in a rate cut during 2024. While the timing and pace of these rate cuts remain uncertain, the prospect of an end to rate hikes is supportive for property investors.
In addition, the Dutch economy is still in reasonably good shape, which, combined with the shortage of (healthcare) housing, is resulting in strong occupier markets. For core real estate, the "zero line" in terms of initial yields and revaluations seems to be in sight, especially in the first quarters, after which a slight recovery is possible.
In this Investment Update, we also focus on the impact of climate risks. Investors will need to be increasingly aware of the impact of climate change on property use and valuation.