A STATE OF AFFAIRS
THE DUTCH
RETAIL MARKET
RETAIL PROPERTY
TAKE-UP
MARCH 2017
RETAIL PROPERTY
SUPPLY
RETAIL PROPERTY
PRICES
RETAIL PROPERTY
INVESTMENTS
Even though the beginning of 2016 was not quite positive, marking the collapse of V&D department stores, the
Dutch retail market may look back on a satisfactory year nevertheless. Thanks to the prompt re-letting of many
of V&D’s former buildings, take-up levels reached a record of 1.1 million square metres. In fact, the amount of
space available dropped for the first time in years; the number of retail properties on offer went down for the
second year in a row.
These positive developments, however, conceal the divide that exists on this market. Major shopping cities
in particular reported higher take-up levels; supply rates going down in most cases. Availability, however,
continued to increase in medium-sized cities and even more so in smaller towns.
NVM BUSINESS THE DUTCH RETAIL MARKET
RETAIL PROPERTY TAKE-UP
TAKE-UP SETS A RECORD
RETAIL PROPERTY TAKE-UP ACCORDING TO OWNERSHIP
Last year, retail property take-up amounted to approximately
1.1 million square metres, up 9% compared to 2015. Take-up
1,200,000
levels climbed mainly as many of V&D’s former buildings were
1,000,000
re-let. They had become available at the beginning of 2016,
after this retail chain had gone bankrupt. As many as 350,000
square metres were left unoccupied as a result, divided over
62 stores. More than half of these premises welcomed a new
800,000
600,000
permanent user in the same year. As for those that didn’t, a tem-
400,000
porary solution was found. Except for Friesland, Gelderland and
200,000
Zeeland, all other provinces reported increasing take-up levels.
Most large cities reported higher take-up levels. Amsterdam and
Source: NVM
m2
0
2007
2008
2009
2010
Rotterdam were an exception, one of the reasons being that in
2011
2012
Letting transactions
2016 contracts had not yet been signed for V&D’s former prem-
2013
2014
2015
2016
Sales transactions
ises in these cities.
RETAIL PROPERTY TAKE-UP BY REGION 2016
NEW ESTABLISHMENTS IN THE FIRST PLACE
Hudson’s Bay dominated retail take-up in 2016. This Canadian
chain claimed 13 of V&D’s former buildings, including those
Amsterdam
Den Haag
Rotterdam
­located in The Hague, Haarlem, Tilburg and Breda. It plans
Utrecht
to open up to about 20 stores in the Netherlands. In Utrecht,
Enschede
­Hudson’s Bay will accommodate V&D’s former building together with Primark. Dutch retailer Topshelf has taken over five of
V&D’s former locations in Arnhem, Nijmegen and Groningen
among other places. Another interesting fact is that the hospitality
Source: NVM
Groningen
Tilburg
Eindhoven
Breda
Almere
business took up many retail properties, pushing up the number
Arnhem
of e.g. coffee shops even further on Dutch shopping streets. In
Haarlem
major shopping cities, retailers were particularly interested in
Maastricht
­premium locations with surface areas starting at 300 m². Units
m2
0
10,000
20,000
any smaller than that were less worth the effort, although some
30,000
40,000
2015
50,000
60,000
70,000
2016
of those located in the city of Amsterdam often served a different
purpose, mostly in a culinary sense.
More than half of all retail transactions involved new establishments. But still, this share dropped slightly as fewer new retail
RETAIL PROPERTY TAKE-UP IN M²
BY SIZE CATEGORY 2016
Source: NVM
businesses were set up compared to 2015. On the other hand,
7%
the number of transactions as a result of expansions/lack of
space increased; the number of transactions with rationalisation
35 %
In 2016, lease transactions took almost just as long as in 2015.
Sales transactions, however, required slightly more time compared to last year. Another interesting detail is that particularly in
the second half of 2016, fewer lease contracts with a contract
period of 2 years or less were signed (a more limited tenant
­protection policy), allowing the average contract period to increase slightly in 2016.
10 %
Source: NVM
2%
5%2%
16 %
being the main reason dropped slightly in 2016.
SLIGHTLY LONGER CONTRACT PERIODS
ONCE AGAIN
NUMBER OF RETAIL PROPERTY
TRANSACTIONS BY SIZE
CATEGORY 2016
9%
33 %
13 %
11 %
10 %
11 %
36 %
0–100 m²
500–1,000 m²
0–100 m²
500–1,000 m²
100–200 m²
1,000–2,000 m²
100–200 m²
1,000–2,000 m²
200–300 m²
≥ 2,000 m²
200–300 m²
≥ 2,000 m²
300–500 m²
300–500 m²
RETAIL PROPERTY SUPPLY
SUPPLY DOWN
RETAIL PROPERTY SUPPLY ACCORDING TO PROPERTY TYPE
In 2016, the amount of retail space available dropped for the
first time in years, in fact by 2.8% to 2.42 million square metres.
The amount of properties on offer also went down last year,
although this was already the case in 2015. At the start of 2016,
7400 shops were available, 7200 towards the end of the same
year (- 2.7%). The amount of space available diminished pretty
much across the Dutch provinces, but most significantly in Flevo-
Source: NVM
m2
2,500,000
2,000,000
1,500,000
1,000,000
land (-9%), Groningen (-8%), Utrecht (-6%) and Friesland (-6%).
Exceptions were made by Noord-Brabant and Drenthe, report-
500,000
ing the same amount of available space compared to last year.
0
Measured by the number of retail properties on offer, supply
2007
2008
2009
levels still climbed in Noord-Brabant; the same happened in Lim-
2010
2011
For rent
burg. Not only healthy demand for retail space, but also the fact
For sale
2012
2013
2014
2015
2016
For rent or sale
that many municipalities were actively pushing down vacancy
levels, paid off eventually. Transforming vacant stores into homes,
offices or hospitality facilities and the temporary redesignation
of vacant properties, the temporary use by start-ups or otherwise, helped push down vacancy levels significantly. Also fewer
RETAIL PROPERTY SUPPLY BY REGION 2016
Rotterdam
Enschede
­retail businesses went bankrupt in 2016. Nevertheless, some of
Almere
the major chains (e.g. Mitra, McGregor, MS Mode, Scheer &
Den Haag
Foppen) collapsed although in most cases they were able to
relaunch, in a reduced form or otherwise. The number of closures
in this industry, however, climbed significantly.
Source: NVM
Tilburg
Arnhem
Amsterdam
Eindhoven
Groningen
EYE-CATCHING DIVIDE
Utrecht
Breda
Supply levels went down mainly thanks to the large munici-
Haarlem
palities (> 100.000 inhabitants), where the amount of space
Maastricht
available dropped by 10%. Supply levels, however, went up
m2
0
10,000
20,000
by 9% in small municipalities (0-20.000 inhabitants). Medium-
30,000
40,000
2015
50,000
60,000
70,000
2016
sized m
­ unicipalities displayed a mixed image: supply levels in
municipalities having 20.000-50.000 inhabitants went down by
4%, yet up by the same percentage in those that are home to
50.000-100.000 people.
RETAIL PROPERTY SUPPLY IN M²
BY SIZE CATEGORY 2016
STRUCTURAL SUPPLY CONTINUES TO RISE
4% 2%
Source: NVM
20 %
14 %
retail properties on offer in late 2016 had been available for rent
municipalities performed best at this level, structural supply aver-
9%
15 %
continued to rise nevertheless. Averagely speaking, 16.8% of
or sale for more than three years, versus 15.7% in 2015. Large
NUMBER OF RETAIL PROPERTIES
ON OFFER BY SIZE CATEGORY
END OF 2016
4%
20 %
Even though supply levels had fallen in 2016, structural supply
Source: NVM
12 %
16 %
aging 12%, although this percentage climbed modestly last year.
15 %
17 %
34 %
18 %
0–100 m²
500–1,000 m²
0–100 m²
500–1,000 m²
100–200 m²
1,000–2,000 m²
100–200 m²
1,000–2,000 m²
200–300 m²
≥ 2,000 m²
200–300 m²
≥ 2,000 m²
300–500 m²
300–500 m²
RETAIL PROPERTY PRICES
RENTS
RENTS OF RETAIL PROPERTY
Average retail property prices that continued to fall year after
year, succeeded in stopping this trend in 2016. Based on NVM
Source: NVM
€ per m²/yr
200
numbers, average rents were at pretty much the same level as
in 2015. This was mainly the case in large cities’ main shopping
areas, where prices were also rather steady in the A1 segment.
Prices are still under pressure in the rest of the Netherlands.
NVM data reveal prices in the provinces of Drenthe, Friesland
and Zeeland continued to fall. Interestingly, the difference between the asking price and the transaction prices has become
180
160
140
120
smaller. In 2016, transaction prices were around 4% below the
asking price, against 6% in 2015. In 2013, the difference was
100
2007
2008
2009
2010
2011
still a generous 8%. Rent discounts were offered slightly more
2012
2013
2014
2015
2016
Retail property
often compared to last year, although the average rent-free periods had been somewhat shortened in 2016. The average rent
discount was 2.4 months versus 2.7 months in 2015. Although
transaction prices were steady in general, the asking prices did
drop although this was mainly the case in small and mediumsized cities, and less so in major cities.
PURCHASE PRICE MOVEMENTS OF THE RETAIL PROPERTY MARKET
Source: NVM
%
10
5
PURCHASE PRICES
0
According to NVM numbers, purchase prices went up for the
-5
first time since 2010. Averagely speaking, they had climbed by
approximately 4% compared to last year. In 2016, the average
-10
selling price was approximately 11% below the asking price,
-15
versus 13% in 2015. The difference between the asking price
and the selling price clearly diminished in recent years. In 20122014, the difference was approximately 15% on average. However, the price difference has not reached the pre-crisis level.
Before the crisis presented itself, the average selling price was
7.5% below the asking price. In Flevoland, Utrecht and NoordHolland, the difference was smallest in 2016 (6%, 7% and 9%
respectively). It was most substantial in Zeeland (15%), followed
by Noord-Brabant, Groningen and Overijssel (approx.14%).
-20
2007
2008
2009
2010
2011
2012
2013
2014
2015
Price movements on the retail property market, year to year, owner-occupier properties
2016
NVM BUSINESS THE DUTCH RETAIL MARKET
RETAIL PROPERTY INVESTMENTS
INVESTMENT VOLUMES LOWER
RETAIL PROPERTY INVESTMENTS ACCORDING TO PROPERTY TYPE
Source: NVM
Based on NVM numbers, approximately 1.55 billion euros
were invested in retail property in 2016, down 38% compared
to 2015 (EUR 2.5 billion). The number of investment transactions
x million €
2,500
remained at the same level, although the average investment
volume involved was signifcantly lower (approx. 13 million)
­
compared to 2015 (approx. 25 million). It is mainly because
fewer portfolio transactions had taken place, and fewer investments were made in shopping malls compared to the year
2015. The largest transaction in 2016 involved the selling of
38 HEMA stores by IEF Capital to Crossroads Real Estate Part-
2,000
1,500
1,000
500
ners (UK). It is said to represent a total of EUR 380 million. The
portfolio included stores on major shopping streets and other
0
shopping areas in large as well as medium-sized cities. Another
2007
2008
2009
2010
2011
2012
Retail property
interesting transaction involved Amsterdam’s shopping centre
2013
2014
2015
2016
Shopping centre
Magna ­Plaza, which exchanged owners at EUR 63.5 million.
It was sold to a group of international investors, who plan to
accommodate a major international retailer and a European
food court as well.
RETAIL PROPERTY INVESTMENTS
BY REGION 2016
Source: NVM
RETAIL PROPERTY INVESTMENTS
BY SIZE CATEGORY 2016
Source: NVM
11 %
15 %
19 %
GROSS INITIAL YIELDS DOWN IN A1
8%
Due to limited availability of initial yields, really understanding
the price development of rented retail property has been some-
7%
17 %
thing of a challenge. Based on the experiences of NVM real
20 %
estate agents, in 2016 yields went down in the main shopping
areas of the Netherlands’ four large cities and cities with an interregional function like Groningen, Maastricht and Eindhoven.
Yields remained steady in Amersfoort and Enschede. However,
they generally climbed in medium-sized cities, pushing prices
down as a result. Interestingly, ownership in these cities is shifting more frequently from institutional investors to private investors, eager to take over premises. The gross initial yield (costs
payable by the purchaser) for 38 HEMA stores (see above) is
said to represent approximately 5%. Magna Plaza was sold at
a gross initial yield of 5.5% (costs payable by the purchaser).
17 %
63 %
11 %
12 %
Central
West North
0–500 m²
North East
West South
East
South
500–2,500 m²
2,500–5,000 m²
5,000–10,000 m²
≥ 10,000 m²
NVM BUSINESS’ VIEW
The increase in (structurally) vacant buildings is forcing medium-sized as well as small cities to make fundamental choices when it comes to shopping areas and disposing of unwanted properties. Also they have the task
of transforming these unwanted and vacant properties that are chasing away consumers rather than attracting
them. Failing to take action will spur the further deterioration of these centres.
DEFINITIONS
RETAIL PROPERTY
VACANCY
A spatial and independent unit accessible to the
Involves the total physically vacant retail properties.
public, used by end consumers for the greater part
Vacancy is usually less than supply.
to display and offer items that are not used on the
spot. Retail trade must be involved. Generally speaking, retail trade can be categorised as follows: food
RENT
and stimulants (food) as well as sustainable and other
The basic rent paid per square metre of lettable floor
(non-food) items.
area, exclusive of Dutch VAT.
TAKE-UP
GROSS INITIAL YIELD
Lease and sales transactions taking place on the
The gross annual rent upon acquisition as a percent-
open market. Users providing for their own accom-
age of the total investment.
modation requirements (‘owner-occupier development’) are not included in take-up volumes. The same
applies to sale-and-leaseback agreements as well as
contract extensions.
SUPPPLY
Retail property immediately available for rent or sale.
Supply does not include outlets under construction
and those yet to be built. Supply includes vacant and
developing outlets as well as spaces that are still being used but which are to be released in the near
future
COLOPHON
March 2017
Composed by
Drs. G. Raven
Data source
NVM Data &
Research,
­Nieuwegein
Design
PROOF the alignment
agency
Photography
Vastned Retail NV