Momentum in real estate investment markets appears to be picking up somewhat, thanks in part to slightly declining interest rates and greater clarity on regulatory measures in the housing market.

In recent weeks, we again asked a large number of investors for their opinions on the current real estate investment sentiment and their expectations for the next six months. The survey results are summarized here.

Supply increases slightly, increase in gross initial yields declines

It is clear from the survey that the supply volume is fairly stable, with only industrial and logistics properties showing some increase in supply.

For gross initial yields, the shifts are more pronounced: where in January more than 75% of respondents observed an increase in yields in the office market, this is now only just over half. For housing, that effect is even more pronounced, from over 80% in January to about 34% now. The retail market, and industrial/logistics properties also show a similar effect. Clear signs of an improving market.

No declines in GIY expected yet

Among GIY expectations for the next six months, few shifts are noticeable. The survey results show a similar picture as six months ago. Further increases in gross initial yields are expected in offices and residential properties in particular.

In the past six months, demand for logistics real estate rose the most and retail fell the most. The other segments remained fairly stable.

The largest increase in investment volume for 2024 is still expected in housing. Six months ago, investors also expected to invest more in retail but that forecast has been revised up considerably. From nearly 60% expected increase in January to about 35% in July this year.

Tipping point financing conditions appears to have been reached

Where since mid-2022 funding conditions seemed to be the main drag on investment activity, there is now some light shining at the end of the tunnel again. The survey shows that currently 85% of respondents believe conditions have remained the same or even improved over the past six months. Six months ago, only 37% held that view.

Risk perception decreases

The average risk perception for Dutch real estate among respondents is 5.8 on a scale of 1 to 10, with 10 representing the highest risk. Six months ago, it was slightly higher at 6.2. Opinions on the current state of affairs vary widely. Core investors are still keeping their powder dry while value add and opportunistic investors are taking their chances. We are waiting for the core and core plus segments to pick up as well, possibly after the expected new interest rate declines?