Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub

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Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Syntrus Achmea
Outlook 2021–2023
Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Table of
  contents

Introduction                                                                     3

Vision: current situation & prospects                                            5

Investing in Dutch real estate and mortgages                                    21

Housing market                                                                 26

Residential mortgages market                                                    41

Healthcare real estate market                                                  52

Retail market                                                                  65

Mixed use                                                                      80

Cover: Klaasje Zevenster, Amstelveen

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Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Introduction

The ultimate impact of COVID-19 on investments          When it comes to real estate and mortgages,
in real estate and mortgages remains uncertain in       it is important to know the long-term economic
the short term. We expect real estate to remain         effects. The prospects for user demand for homes,
a relatively attractive investment due to contin-       mortgages and healthcare remain good. However,
uously low interest rates and a shortage of supply      rising unemployment may have an impact on
in the residential and healthcare real estate           affordability for consumers. The outlook that
markets. These factors are likely to drive              underlies the government’s recent
ongoing demand for these asset classes in the           Budget Memorandum predicts a substantial rise
short and medium term. By investing now, it is          in unemployment, particularly in 2021. There is
possible to secure financial and social returns in      nevertheless a great deal of uncertainty about
the longer term.                                        those forecasts.

The Outlook 2021-2023 was prepared during               In Q2 2020 we published various corona updates
an extraordinary period of time, in between the         about economic and market developments,
relaxation of the coronavirus measures at the start     each based on the latest insights on the rapidly
of June 2020 and the sharp renewed rise in the          changing situation. The latest corona update
number of daily infections in mid September 2020.       issued at the end of May explored a number of
                                                        recovery scenarios that still apply. These recovery
Due to COVID-19, we have spent the past half year       scenarios may need to be revisited in the light of
living between hope and fear, with the dominant         developments in the next six months, in which case
emotion changing by the week. The metaphorical          we will issue a revised corona update in due course.
‘thick fog’ that we have been feeling our way
through since the start of Q2 2020 has dissipated
to a reasonable extent. As a society we are
becoming better and better at dealing with the
implications of this unexpected external shock. The
number of infections recently began to rise again
but radical measures such as a complete lockdown
will probably no longer be necessary. Instead
there will be specific solutions tailored to regional
circumstances. New insights have been gained
on how to treat COVID-19 patients and there is
keen anticipation surrounding rapid testing and,
of course, a vaccine. The large-scale roll out of a
vaccine is not expected until early 2021.

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Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
This outlook is comprised of three parts:            The subjects addressed are as follows:

Vision: current situation & prospects                Residential
This part looks at the current economic and social   •   a safe haven offering excellent prospects. Find
situation and outlines the prospects for investors       out more in the chapter Housing market.
based on challenges related to urban development,
ESG and innovation.                                  Mortgages
                                                     •   An attractive, low-risk investment product. Find
Investing in Dutch                                       out more in the chapter Residential mortgages
real estate and mortgages:                               market.
This chapter explains why Dutch real estate and
mortgages are attractive to investors, including     Healthcare real estate
foreign investors. It also sets out the specific     •   A meaningful investment in short supply. Find
high-opportunity investment options in each asset        out more in the chapter Healthcare real estate
class.                                                   market.

Focus on asset classes:                              Retail
Residential, Mortgages, Healthcare Real Estate       •   Limited opportunities available in a market in
and Mixed use are explored in detail in separate         transition. Find out more in the chapter Retail
sections. Based on a description of developments         market.
in the user and investment market and an
assessment of trends, we present an investment       Mixed use
focus for the period 2021-2023.                      •   Multifunctionality and location quality form the
                                                         basis for sustainable returns.
                                                         Find out more in the chapter Mixed use.

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Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Vision: current
situation & prospects
Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Table of
 contents

Introduction                                     7

Economy                                          8

Society                                          11

Urban development                               14

ESG                                             17

Innovation                                     20

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Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Introduction

Syntrus Achmea aims to deliver financial and social returns
for its clients. The chances of achieving these returns
depend on trends and developments and the way in which
they are interpreted. This chapter addresses current issues
and the challenges that they pose to investors.

The first section looks at the current situation.
Syntrus Achmea will outline the current issues from an
economic and social perspective. The common thread
running through these issues is COVID-19. During the first
few months of the coronavirus crisis, Syntrus Achmea issued
regular updates that explored and updated the economic
scenarios. This Outlook incorporates the latest insights.
Besides the impact of COVID-19 on life in general, there are
also a number of political and social developments to take
into consideration. This means taking stock of developments
that may have a potential impact on investments in real
estate and mortgages.

The second section translates economic and social
developments into the challenges posed to investors.
These challenges are divided into three categories. First,
we consider expectations in relation to urban development
and indicate the challenges in relation to which institutional
investors have a role to play. Secondly, we look at the ESG
perspective, given the increasing importance of socially
responsible investment. Finally, we examine the subject of
‘innovation’ and highlight the relevant investment opportu-
nities that are available.

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Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Economy

       •   The crisis caused by COVID-19 is        •   The Dutch economy is expected to
           having an impact on Dutch society and       make a ‘U-shaped recovery’. Under this
           economic performance. Compared              scenario, a slow economic recovery can
           with other countries in the Eurozone,       be expected in 2021. However there
           the Dutch economy is still performing       is considerable uncertainty and much
           relatively well, because the lockdown       will depend on the point at which a
           here was less strict and the public         vaccine becomes available. Until then,
           finances were in a strong position at       we cannot expect to see an economic
           the outset.                                 recovery in every sector.

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                                                                                          Vision
Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Current situation
In March 2020 COVID-19 brought an end to six             wherever possible and maintain the appropriate
years of economic growth in the Netherlands.             distance. This has caused a long-term drop in
The end of the crisis is not yet in sight and            demand. Political tensions between the United
there is considerable uncertainty. The economic          States and China have flared up again and there
consequences are visible in sectors such as              is a real chance that the previously signed trade
aviation, travel, hospitality and retail. The Dutch      deal will be ditched. It should be noted that there
government has used its biggest ever financial           seems to be a connection between the strictness
support package to try to keep the Dutch economy         of a country’s lockdown and the extent of its
and businesses running, but will be unable to avert      economic contraction.1 In Europe the economy is
a recession.                                             expected to contract by between 8 and 9 percent.
                                                         In order to limit the damage caused to Europe’s
The global economy has been badly hit too.               economy by COVID-19, European leaders reached a
The OECD is even talking of the biggest crisis           historic agreement in mid-July 2020 on a European
since the Second World War. In many countries            corona support package and a multiannual financial
people are committed to a lengthy period of ‘social      framework (MFF).2
distancing’, in which they avoid public places

Scenarios
COVID-19 has caused an even faster decline in            This uncertainty makes it advisable to consider
international trade than the financial crisis of 2008.   various scenarios. The economic recovery could
There are early signs of a cautious recovery in          be V-shaped, U-shaped or L-shaped.5 Syntrus
the Dutch economy, although global trade is still        Achmea initially assumed that there would be a
lagging behind. The Netherlands’ dependence on           V-shaped recovery, but now expects the recovery
international trade makes it particularly vulnerable     to be U-shaped. This U-shaped recovery scenario
to a drop in demand from abroad. Forecasts               is also the basic assumption of sources such as the
of the size of the contraction vary from 5 to 8          IMF, the European Commission, ING, Rabobank and
percent in 2020.3 Compared with other countries          Oxford Economics. This recovery scenario involves
in the Eurozone, the Dutch economic contraction          a longer recession. In the course of 2021 we expect
has been relatively mild because the lockdown            to see a slow economic recovery, because for a
here was less strict and the public finances were        long period people will still be expected to avoid
in a strong position at the outset. The digital          crowds and keep their distance. A longer crisis
infrastructure of the Netherlands is also better         could result in higher inflation, further fluctuations
organised, which made the large-scale switch to          in supply and demand, accompanied by layoffs,
working from home relatively simple for many             bankruptcies and disruptions to international
companies. The fact that the Dutch have long been        trade. An extended period of uncertain economic
accustomed to online shopping was also helpful,          prospects will lead to companies and consumers
keeping sales in sectors such as personal care and       being cautious in their expenditure.
household items at a reasonable level.
In 2021 a recovery of between 3 and 5 percent
is expected,4 but there is still a great deal of
uncertainty.

1)   https://www.volkskrant.nl/economie/coronavirus-oorzaak-van-acht-unieke-economische-records~bc6cc353/
2)   https://fd.nl/economie-politiek/1351378/akkoord-in-brussel-over-begroting-en-herstelfonds
3)   https://economie.rabobank.com/economisch-kwartaalbericht/
4)   https://www.cpb.nl/juniraming-2020 https://www.dnb.nl/binaries/NL_2020%20EB%20Nummer%204_tcm46-389179.pdf
5)   Syntrus Achmea Outlook 2020-2022 Update COVID-19: http://www.syntrusoutlook.nl/2020-2022/corona-update/

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Syntrus Achmea Outlook 2021-2023 - IPE Reference Hub
Challenges
It is difficult to predict the depth and duration    Since July 2020 the number of infections has been
of the economic crisis and therefore also the        rising again worldwide. The virus is spreading
implications for investments in real estate and      once more and this trend can now be described
mortgages. The fate of the Dutch economy             as a second wave. A second large-scale outbreak
will depend heavily on how the virus outbreak        accompanied by stringent measures would once
continues to evolve (for example, will stricter      again have a heavy impact on the Dutch economy.
measures be adopted at local or regional level?)     The big question is: when will a vaccine become
and on the development of a vaccine. There is also   available? Most experts assume that this will not
uncertainty about the economic consequences of       happen until during 2021. Until then, we cannot
government measures to curb the pandemic. It         expect to see an economic recovery in every sector.
is encouraging that the spread of the virus in the
Netherlands and many other European countries
decreased sharply in May and June 2020 and that
governments have relaxed the measures.

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Society

        •   In recent years there has been a much       and self-employed people. In addition,
            greater focus on social subjects such as    a support agreement has been reached
            livability and quality of life. COVID-19    specifically for retailers, in order to
            and the social-distancing measures          facilitate tailored solutions for surviving
            have further increased that focus. Other    the crisis. After lengthy negotiations,
            developments are also having an impact      a pension agreement was finally
            on our society and the real estate sector   agreed shortly before the summer of
            in particular, for example the measures     2020. This agreement is intended to
            related to nitrogen emissions and the       deliver a simple, understandable and
            debate on PFAS, as well as measures to      personalised pension system that takes
            encourage modular, energy-neutral and       account of the different investment
            nature-inclusive construction.              horizons of younger and older people.
                                                        An alternative to the widely discussed
        •   In the political arena, the government is   ‘emergency brake’ for the housing
            making considerable efforts to counter      market has also been presented, with
            the effects of the crisis. Emergency        the aim of preventing excesses.
            packages have been put together to
            provide financial support to companies

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Current situation
The world is continuously changing. The Netherlands           are being hit disproportionately and have taken
has evolved from a relatively homogeneous and                 action. The government’s decision on nitrogen
stable society into a society of great variety, diversity     emissions has disadvantaged the construction
and complexity.1 These changes present challenges.            industry as well, which is also having to deal with the
How do we ensure that everyone can live together              debate on PFAS. As a result, construction projects
comfortably and peacefully with a sense of mutual             have been severely delayed or come to a standstill.
connection and equal opportunities for all? COVID-19          The strict rules on moving contaminated soil have
and social distancing are having a major impact on            been relaxed slightly, apparently creating more
Dutch society and behaviour. In some respects this            scope for a resumption of construction activities.2
exacerbates tensions, causing fear and uncertainty.           At the same time work is being done to develop
As a result, a debate has arisen about whether                modular, energy-neutral, circular and nature-in-
economic well-being should be sacrificed for the              clusive construction methods and to make better
sake of public health. Besides COVID-19, there are            use of innovative technologies and materials.3 Smart,
also other developments that are having an impact             innovative construction may also offer a solution to
on society. Measures to reduce nitrogen emissions             the relentless rise in construction costs. It would also
and the debate about those measures, are affecting            reduce nitrogen emissions.
a large number of sectors. Farmers believe that they

Politics
COVID-19 is also having a political impact. Since             pension agreement is currently being elaborated in
March 2020 the government has been heavily                    further detail and should be complete by the start of
engaged in action aimed at curbing the pandemic.              2022. This will result in a simple, understandable and
A national crisis organisation – the Ministerial              personalised pension system. 4 An alternative to the
Crisis Control Committee – has been established               widely discussed ‘emergency brake’ for the housing
to coordinate these efforts. The government has               market has also been presented. This involves
supported businesses and self-employed people                 measures to give people on average incomes and
with two emergency support packages, while a third            starters greater opportunities in the housing market.
package is currently being prepared. In addition, a           An upper limit will be set for annual rent increases
specific agreement has been concluded for retailers           in the liberalised sector and protection against
by a variety of sectoral organisations, landlords,            ‘buy-to-let’ will be introduced. This will require
banks and the Ministry of Economic Affairs. This              institutional investors to self-regulate.
support package creates scope for customised
solutions for supporting retailers that experience            Like in many other European countries, the Dutch
serious financial difficulties. But COVID-19                  political landscape has become fragmented in
has not been the only subject on the political                recent years. The big parties are getting smaller
agenda in recent months. In June 2020, following              and the small parties are getting bigger. New
lengthy negotiations, the social partners and the             movements are emerging and the dominance of
government finally concluded a pension agreement.             the established parties is in decline. In this context,
The reformed pension system will no longer provide            the outcome of the 2021 elections for the Dutch
a nominal commitment, but will instead involve a              House of Representatives will be worth watching.
more individualised accumulation of capital under             It is almost certain who the party leaders will be
a contribution scheme that incorporates collective            and the parties are ready to start campaigning in
risk sharing. Attention will be paid to the different         the autumn of 2020. The manifestos have not yet
investment horizons and the associated risks                  been published, but the key general subjects are
of younger people as opposed to older people.                 expected to be the climate (for example nitrogen
Pension funds may vary the investment mix for                 emissions, Green Deal) and immigration, alongside
investments in real estate and mortgages, since               more topical issues such as COVID-19 and racism.
their schemes will no longer provide a nominal
commitment, and investment will not be dependent
on age and may also continue after retirement. The

1) https://kennisopenbaarbestuur.nl/thema/trends-en-ontwikkelingen/
2) https://www.bnr.nl/nieuws/binnenland/10414339/bouwend-nederland-blij-met-verruiming-pfas-normen
3) https://www.pwc.nl/nl/actueel-en-publicaties/diensten-en-sectoren/bouw/stikstofbesluit-en-aanbevelingen-commis-
   sie-remkes-voor-de-bouw.html
4) https://www.verzekeraars.nl/media/7180/pensioen.pdf

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Social
In recent years there has been a much greater focus              Although COVID-19 has greatly increased social
on social subjects and a keener awareness of social              solidarity and trust, this is expected to be temporary
developments.1 Although Dutch people have for                    phenomenon, owing to the shift in values that is
many years been among the most content in the                    required in order to achieve permanent change.
world and score well when it comes to livability                 Such a shift in values generally takes place over
and living conditions, there are concerns about the              several generations.3 COVID-19 may leave a lasting
quality of life of, for example, people with a lower             impression on young adults, who are growing up
level of education and lower incomes.2 As variety                during a crisis and whose futures will be shaped by
and diversity have increased in the Netherlands,                 these socioeconomic conditions. The coronavirus
tensions have flared up from time to time. Unease                crisis will have a major impact on them and in the
and dissatisfaction have polarised the political                 longer term it may cause a permanent change
debate. ‘Black Lives Matter’ is a key example of such            in attitudes.
a movement. Instead of emphasising the differences
between cultures and groups, it is crucial to find
common ground and seek connection.

1)   https://www.communicatierijk.nl/vakkennis/trends-voor-overheidscommunicatie/trendoverzicht-2019/de-samenleving-
     wordt-steeds-meer-‘woke’
2)   https://www.sociaalweb.nl/cms/files/2019-09/de-sociale-staat-van-nederland-2019-def-.pdf
3)   Verwachte gevolgen van corona voor de opvattingen en houdingen van Nederlanders (Expected implications of corona-
     virus for views and attitudes of the Dutch), SCP – 17 July 2020: https://www.scp.nl/publicaties/publicaties/2020/07/17/
     verwachte-gevolgen-van-corona-voor-de-opvattingen-en-houdingen-van-nederlanders

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Urban
  development

        •   In order to remain future-proof and        •   The Netherlands and the real estate
            relevant, cities need to demonstrate           sector are confronted with the challenge
            resilience and adapt to changing               of a major transition: a structural
            circumstances. The city of the future          transformation of how the country
            faces many challenges. COVID-19                and sector are organised and how all
            is making it even more urgent to               the parties work together. Delivering
            respond to important trends, such as           future-proof cities and encouraging
            ongoing urbanisation, facilitating rapid       social cohesion will require connection
            population growth in cities and the            and close cooperation.
            strong rise in demand for mid-market
            rental housing.

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Role of the city vs. the countryside
COVID-19 has opened up a new perspective on the             Others will move to the newly developed
role of cities vs. the countryside. As working from         city outskirts, while continuing to benefit from all
home becomes the new normal, it will no longer be           that the city has to offer. This trend is known as
essential for people to live close to the office. Rural     reurbanisation.
areas have lower housing prices, as well as more
open space and greenery. Although the appeal                The city of the future is a city in balance, offering
of rural areas is growing, particularly for families        both busy spaces and peaceful spaces. It will have
with children, there will not be a mass migration           variation between densely urbanised areas and
from city to countryside. Even before COVID-19,             greenery and open spaces. Pedestrians and cyclists
people living in the Randstad region were already           will be given more room, while the dominance of
swapping their city dwellings for homes in                  the car will decline. The city of the future will take
rural areas. Ambitious young people are always              account of livability and safety and will encourage
expected to be drawn to cities.                             social cohesion. It will be a city for everyone. A city
                                                            whose residents are healthy and happy.

Opportunities and challenges presented by COVID-19
Even before the pandemic, cities were facing                COVID-19 is accelerating these trends. The
challenges, such as rapid urbanisation                      pandemic has changed how people think about
and the accompanying population growth. The                 mobility, work and cities. In most cities, livability
affordability of housing is under pressure, with            is under pressure. The challenge is to maintain the
particularly high demand in the mid-market                  appeal of cities for ambitious young people, families
segment. But there are also issues in relation to           with children and older people. In doing so it will be
mobility and infrastructure. The demand for homes           necessary to take advantage of the potential of the
in the Netherlands is substantial. Over the next            city while ensuring sufficient quality of housing and
ten years at least 800,000 additional homes will            life. In most cities there is a qualitative mismatch
need to be built. At the same time, the debate on           between demand and supply. Many people don’t
particulate matter, nitrogen and carbon emissions           live where they want to live. Supply seems to drive
is hampering these construction efforts. Climate            demand. For all functions – housing, work, retail and
change is also forcing the construction and real            relaxation – the focus needs to shift from quantity
estate sector to adapt by building differently and          to quality and more consideration must be given to
using new materials, such as timber.                        greenery and public spaces.

The challenge of transition
The Netherlands and the real estate sector                  urban areas. A Digital City is a city arranged in
are confronted with the challenge of a major                a smart, sustainable and efficient way, possibly
transition: a structural transformation of how the          supported by technology. The key to the smart
country and sector are organised and how all the            city and to new urban strategies is to be resilient
parties work together. From an economy focused              and future-proof. The aim is also to ensure that the
overwhelmingly on finance to an economy for the             built environment is multifunctional and diverse. An
common good, which prioritises the importance of            Inclusive City is a city for everyone, a city whose
people and nature rather than the pursuit of profit.        residents are healthy and happy. Increasing isolation
For urban areas and district developments, compre-          and widening differences between population
hensive added value and long-term resilience will           groups present a major urban challenge.
be essential. It is all about balance: the collective vs.   The key is to create meeting spaces with a view
the individual, the short term vs. the long, evolution      to the various target groups and their needs. A
vs. revolution and the influence of the old and the         Green City is a city with plenty of greenery and
young on society’s revenue models.                          public spaces. These are places where residents can
                                                            exercise, relax and meet their family and friends.
For the purposes of this transition, Syntrus Achmea         Multifunctionality is also essential in this connection.
has formulated three themes: the Digital City, the          Parks may also function as gyms, car parks as cafe
Inclusive City and the Green City. These themes             terraces and roads as cycling and walking routes.
constitute the perspective from which we view

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Urban partnerships
The city of the future faces many challenges.              Some key urban themes include making housing
Delivering future-proof cities and encouraging             more affordable for specific target groups,
social cohesion will require connection and                encouraging social cohesion at neighbourhood level
close cooperation. It calls for partnerships with          and developing new mobility concepts. The biggest
urban stakeholders, such as municipalities and             challenge is the housing shortage. Research on
developers, aimed at helping to improve cities             demographic developments shows that the housing
and neighbourhoods on the basis of a shared                shortage is worst for single-person households and
vision: making them more appealing, sustainable            senior citizens. Investors, housing associations and
and inclusive. Furthermore, the issues related to          municipalities need to put more emphasis on
city-centre district development are too complex to        working together to deliver the right product. This
solve alone. Partnerships will be crucial.                 is not only about financial returns, but also about
                                                           future-proof living environments. A comfortable
                                                           living environment helps improve the well-being and
                                                           happiness of a city’s residents.

Relevance to investors
It is crucial for investors to be aware of the essential   Only with knowledge of trends and challenges,
requirements for a city and for future-proof               as well as considerable commitment and close
locations, combined with knowledge of urban target         cooperation, will investors be able to create livable
groups. Although dynamics in cities and society in         and safe living environments.
general are currently dominated by COVID-19, cities
are not losing their appeal.

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ESG

        •   The climate remains the key challenge      •   Tenants are increasingly choosing
            of our times. In the years ahead a great       homes on the basis of their
            deal of attention must be given to urban       surroundings. A long period of being
            flooding and heat stress caused by real        isolated at home due to COVID-19 has
            estate and new investments. Besides the        altered many people’s attitudes to their
            climate, there also needs to be a focus        own living environment. Increasingly,
            on sustainable mobility and sharing            people feel the need for connections
            concepts, also known as ‘mobility as a         with neighbours, other residents and
            service’.                                      the neighbourhood itself. Spontaneous
                                                           encounters in community spaces and
                                                           shared usage schemes can help to fulfil
                                                           this need.

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Climate change
Although it may have been pushed into the                 higher domestic energy consumption? It will be
background by COVID-19, the climate remains               necessary to reduce demand for energy and, in
the key challenge of our times. For investors, two        the slipstream, to (collectively) generate energy
dimensions are important: on the one hand, limiting       from clean sources. In addition, circularity in the
climate change by reducing carbon emissions and,          construction industry and the reuse of waste
on the other, pursuing climate adaptation strategies      can also contribute to delivering the necessary
to deal with the effects of noticeable climate            reductions.
change.
                                                          Besides climate-neutrality, climate-proofing will
It is essential to reduce carbon emissions.               become another factor for investors to take
Long-term targets for Dutch emissions are set out         into account. The impacts of climate change are
in the 2019 climate agreement: a 49% reduction            varied: flooding due to extreme rainfall, weakened
compared with 1990 levels by 2030 and a 95%               foundations due to declining groundwater levels,
reduction by 2050. The coronavirus crisis has led         as well as heat stress in urban areas and wildfires.
to lower emissions, particularly in Q2 2020, due          In the next few years we will need to focus heavily
to reductions in road traffic and air travel. After       on identifying the risks posed to real estate and
Q2 2020, emissions rose once more as restrictions         new investments. Building modifications might be
were relaxed. The impact of working from home             necessary, but adaptations may also have to be
will only become clear over the longer term. Will         made to new-build construction projects.
the reduction in transport movements outweigh

Mobility
COVID-19 has had an unexpected impact on                  economic and social value. Sustainable mobility also
mobility. The Netherlands Institute for Transport         involves several other aspects, however. The market
Policy Analysis (KiM) says that the pandemic              share of fully electric-powered cars is surging, while
has boosted the popularity of cars and bicycles,          sales of e-bikes recently overtook traditional bikes.
while public transport is struggling. After years of      More relevant to investors is the rise of shared
apparently unstoppable growth, it seems almost            mobility schemes. A concept like Mobility as a
unbelievable that the Dutch railway operator NS           Service (MaaS) represents a transition, in which
has been forced to take far-reaching measures and         the consumer buys mobility rather than investing
announce significant redundancies. Partly in view of      in a mode of transport. The essential change for
the substantial investments made in recent years,         investors is that they need to start thinking in
rail travel is firmly expected to be ‘back on track’ in   terms of service levels, based on additional revenue
due course. After all, the public transport network       streams. New services will consist of a combination
forms the backbone for sustainable development            of public transport, demand-driven transport
in the Netherlands. This network is the basis for an      and private vehicles and the service will include
intricate urban structure, within which each location     planning, booking and paying for the trip.
has its own optimal mix of functions with both

Livability
The dimensions that determine the livability of           In addition, investors can boost the livability of a
an area or location for tenants – and therefore           neighbourhood by means of their real estate
their choice of home – will have to be taken into         investments. For instance, they can rent out
account in the investment decision. A long period         residential units to target groups such as students,
of being isolated at home due to the coronavirus          starters or senior citizens with care needs, in order
has altered many people’s attitudes to their own          to increase local diversity. Adding mid-market
living environment, by forcing them to spend more         rental properties to a neighbourhood where there
time there. Livability is related to health, safety and   is lots of social housing can help encourage people
sustainability, but also variation as well as other       to move up the housing ladder. Another option is
residents and users. The extent to which these            to accommodate services and facilities that are
aspects help make a living environment (or attitudes      relevant to the neighbourhood in the ground floor
towards it) more appealing will vary from person to       of residential complexes. This will necessitate a
person. For investors it would be wise to realise that    carefully devised concept that gives consideration
tenants don’t just choose a home, but also take the       to the needs of target groups and takes into
living environment into account in their decision.        account the features of a location.

18/89                                                                      Syntrus Achmea Outlook 2021-2023
Social cohesion
People are social beings and benefit from social        Besides being an important goal in itself, social
interaction, which contributes to their sense of        cohesion also has a financial component: real
well-being. When people feel happier, their health      estate that makes its residents/users happy will
benefits too. This highlights a crucial argument        remain of value to them for longer, making it a
for investors to use their investments to boost         better investment. Happy residents take better
social cohesion. It is about experiencing a sense of    care of their homes and living environments, which
connection with others, but also a sense of respon-     reduces operating costs. Generally speaking, this is
sibility for each other’s welfare. Community spirit     a way of limiting or even avoiding social problems.
is particularly easy to encourage in a residential      For example, it can reduce health complaints and
complex or neighbourhood. This can be achieved by       isolation, which occur in all population groups.
facilitating spontaneous encounters, for example in     Social cohesion lowers the barriers that stop
community facilities or spaces, or by offering shared   people from looking out for one another.
usage schemes for mobility. In larger complexes
a community manager can foster connections
among residents and possibly even within the
neighbourhood.

19/89                                                                   Syntrus Achmea Outlook 2021-2023
Innovation

        •   Innovation has a crucial role to play     •   A specific example would be timber
            in the search for long-term, stable           construction, which reduces carbon
            returns on real estate and mortgage           emissions, or focusing on the health and
            investments that have a positive impact       happiness of residents by reconfiguring
            on people, society and the environment.       real estate to respond more effectively
            This may involve investing in new asset       to the rapidly changing social context of
            classes or demand-driven investment           cities and residential buildings. Another
            that focuses on target groups.                example would be investing in the right
                                                          product/market combinations based on
                                                          clearly segmented target groups.

20/89                                                             Syntrus Achmea Outlook 2021-2023
The importance of innovation
As an investment manager, Syntrus Achmea                  demand-driven investment by focusing
believes that innovation has a role to play in the        on target groups.
search for long-term, stable returns on real estate
and mortgage investments that have a positive             With respect to each innovation initiative, it is
impact on people, society and the environment.            relevant to answer two questions before moving on
Innovation may be linked to the changing needs of         to implementation:
investors for instance through the implementation         • Is it feasible: can it be achieved under
of ESG policy, to trends related to investment in             reasonable conditions?
real estate and/or mortgages (such as the rise of         • Is it viable: can it be operated/generate a profit
new asset classes) but also through dynamism to               in the longer term and will it make a positive
the user market or investment market, centered on             contribution to the risk/return profile?

Types of innovation
Innovations in investment management come in a            •   Improving the operation of the real estate in the
variety of types:                                             portfolio: for example by offering services or
•   New assets classes: for instance investing in             shared mobility schemes to tenants or by using
    mixed-use properties or social real estate;               smart sensor technology;
•   Existing asset classes with a different risk/         •   New concepts: for instance investing in
    return profile: for instance residential properties       residential complexes that focus heavily on
    constructed from timber; and other                        health and happiness.
    impact investments
•   Customer preferences: for example new funds
    with a geographical focus based on ESG
    or target groups;

Examples
Timber construction – This brings together a variety      for health insurers by cutting demand for healthcare,
of innovative aspects, the unifying theme of which        and healthy buildings can also be expected to
is impact. As a form of circular construction, timber     reduce their tenants’ housing costs.
construction makes a significant contribution to
reducing carbon emissions. The short construction         Focus on target groups – For investors, the question
time can help accelerate efforts to tackle the            ‘who is the end user of the real estate in which we
housing shortage. It also meets demand for living         invest?’ is becoming increasingly important. This
environments where residents can be healthy and           is in line with the trend towards demand-driven
happy. Timber construction fulfils a broad range          investment, in other words: investing in the right
of social needs and helps investors to combine            product/market combinations with a focus on
financial and social returns.                             clearly segmented target groups. This enhances the
                                                          quality of a portfolio and reduces risk. Target group
Focus on health and happiness – Real estate that          segmentation helps to gain greater insight into the
takes account of the user – and their health and          behaviour, wishes and preferences of different types
happiness -– is better configured for the rapidly         of tenants, thereby enabling a building to more
changing social context of cities and residential         closely match their needs and requirements.
buildings and can therefore be operated for longer.
Happy residents take better care of their homes and
living environments, which reduces the landlord’s
operating costs. Greater engagement will also boost
social interaction. Buildings that promote the health
of residents may deliver lower insurance premiums

21/89                                                                     Syntrus Achmea Outlook 2021-2023
Investing in Dutch
real estate and
mortgages
Dutch real estate and residential mortgages                    investment portfolios of pension funds for decades
offer Dutch and international investors excellent              and that more and more international investors are
opportunities for diversifying their investment                becoming interested in the possibility of investing
portfolios while maintaining an attractive balance             in Dutch real estate and mortgages. Interest among
between return and risk. So it’s unsurprising that             international investors has shown particular growth
this asset class has been an established part of the           over the past five years.

INVESTMENT VOLUME IN DUTCH REAL ESTATE BY OWNERSHIP

x € billion

25
                                                                                                       Other

20                                                                                                     Private
                                                                                                       Institutional
15                                                                                                     Non-Dutch

10

5

0
              2010   2011       2012   2013   2014   2015   2016    2017   2018   2019   2020
                                                                                          H1

Source: RCA (2020), adapted by Syntrus Achmea Real Estate & Finance

The Netherlands has an open, diversified economy               and for many years the Netherlands has scored well
and a stable, balanced political climate. Urban                on the real estate transparency index. The basic
planning is strongly regulated, which contributes to           conditions are in place to facilitate responsible
the shortage of real estate. Lots of data is available         investment in sustainably developed real estate.

TOP 15 GLOBAL REAL ESTATE TRANSPARENCY INDEX 2020 (THE LOWER THE SCORE, THE BETTER)

            Hong Kong
             Singapore
               Belgium
                Finland
           Switzerland
              Germany
               Sweden
                Ireland
       The Netherlands
          New Zealand
                Canada
                 France
              Australia
         United States
       United Kingdom
                            0                 0,5             1,0                 1,5            2,0

Source: JLL (2020), adapted by Syntrus Achmea Real Estate & Finance

23/89                                                                             Syntrus Achmea Outlook 2021-2023
The Dutch economy is based on a mix of services,                             mainly relates to mortgage debts for people’s
trade and industry, making it resilient to economic                          own homes. In recent years the Dutch economy
adversity. The Netherlands also has relatively high                          has grown at the same pace as the Eurozone.
incomes, a high level of savings, good pensions and                          Although it is not yet possible to determine the
low unemployment rates, which keeps consumer                                 precise impact of COVID-19, the initial predictions
expenditure at a high, stable level. On the other                            of Oxford Economics indicate that the economic
hand, the Netherlands has one of the highest                                 contraction in the Netherlands has been relatively
household debt levels in Europe, although this                               limited compared with the rest of the Eurozone.

ECONOMIC GROWTH

Percent

10
                                                                                              Forecast               Eurozone
8
6                                                                                                                    The Netherlands
4
2
0
-2
-4
-6
-8
-10
          2010

                 2011

                        2012

                               2013

                                      2014

                                             2015

                                                    2016

                                                           2017

                                                                  2018

                                                                             2019

                                                                                    2020

                                                                                           2021

                                                                                                  2022

                                                                                                         2023
Source: Oxford Economics (2020), adapted by Syntrus Achmea Real Estate & Finance

The Netherlands’ demographic outlook is                                      investments in real estate and mortgages, partic-
attractive, particularly in comparison with Europe                           ularly because long-term trends such as expanding
in general. Steady population growth, with an                                urban areas, shrinking households and population
expected increase of 1.2 million (6.8 percent) by                            ageing present specific opportunities in specific
2030, offers good opportunities for long-term                                investment segments or geographic regions.

FORECAST FOR POPULATION GROWTH COMPARED WITH 2020 PER SIZE OF MUNICIPALITY

   250.000 inh. or more
                                                                                                                                2030
 150.000-
The Dutch investment market for real estate                                                                                                           The Dutch retail market offers sharply variable
and mortgages has a number of interesting                                                                                                             prospects, including both opportunities and
categories, within which there are a variety of                                                                                                       threats. Suburban centres and shops that focus
attractive subsegments. The key characteristics are                                                                                                   on daily necessities are generally immune to
summarised below.                                                                                                                                     economic downturns and therefore offer opportu-
                                                                                                                                                      nities to investors. Shopping centres and city
Investing in Dutch rental housing offers a                                                                                                            centres present a mixed picture. Particularly in
strong basis for stable financial returns. There                                                                                                      secondary shopping streets and shopping centres
is a structural housing shortage that will persist                                                                                                    that have a less dominant position, vacancy rates
throughout the next few decades, causing huge                                                                                                         are increasing, rents are under pressure and initial
demand for housing both now and in future.                                                                                                            yields are rising. Over the longer term demographic
Although there are housing shortages in all                                                                                                           growth will continue to ensure sufficient consumer
segments, the mismatch between supply and                                                                                                             potential in attractive city centres and traffic
demand is particularly great in the mid-market                                                                                                        locations, thereby offering investment opportu-
segment. There are many opportunities available                                                                                                       nities.
here and the rental risk is limited due to the
relatively low rents involved. By investing in                                                                                                        Mixed-use real estate presents opportunities due
sustainable mid-market rental housing it is also                                                                                                      to the pressure on the big cities. The larger Dutch
possible to achieve social returns.                                                                                                                   cities are vigorously pursuing densification in
                                                                                                                                                      order to satisfy the high demand for housing and
As an investment, Dutch residential mortgages                                                                                                         are adding urban functions to boost the vibrancy
offer an excellent risk/return ratio. The risk                                                                                                        of city centres outside office and shopping
is somewhere between that of government                                                                                                               hours. Mixed-use buildings – both new-builds and
bonds and covered/non-covered investment                                                                                                              transformations – have a crucial role to play in this
grade corporate bonds. However, the returns                                                                                                           respect and as a result, the investment opportu-
are higher. The risk of losses is limited by social                                                                                                   nities in this category will increase.
security and the good payment ethics of Dutch
households. Furthermore, over the past ten years                                                                                                      Long-term interest rates in the Netherlands have
the government has implemented reforms to the                                                                                                         dropped relatively sharply since 2014, reducing the
mortgage market, improving its robustness.                                                                                                            returns on risk-free investments. The large volume
                                                                                                                                                      of capital in the market and the search for yield
The Dutch healthcare real estate market offers                                                                                                        have made alternative investment segments, such
strong fundamentals. Population ageing and the                                                                                                        as real estate and mortgages, relatively attractive to
out-of-date stock real estate in this category are                                                                                                    investors on account of the high risk premium. Since
driving high demand for healthcare real estate.                                                                                                       it is realistic to expect a scenario of low interest
There is strong political commitment and a clear                                                                                                      rates to continue in the longer term, risk premiums
policy direction. Healthcare real estate is relatively                                                                                                will ensure that real estate remains a relatively
immune to economic downturns and offers                                                                                                               attractive investment. In the short and medium term
investors the chance to achieve social impact.                                                                                                        this is likely to continue to drive demand for real
                                                                                                                                                      estate. The initial yields that investors are willing to
                                                                                                                                                      accept on real estate investments are expected to
                                                                                                                                                      remain relatively low as well.

RISK PREMIUM IN REAL ESTATE SEGMENTS (BASED ON DIFFERENCE BETWEEN HIGHEST INITIAL YIELDS
AND 10-YEAR GOVERNMENT BONDS)

Percent

6
                                                                                                                                                                                                                            Intramural healthcare
5                                                                                                                                                                                                                           real estate
                                                                                                                                                                                                                            Residential
4
                                                                                                                                                                                                                            Offices
3                                                                                                                                                                                                                           Retail

2

1

0
          2010 Q2
                    2010 Q4
                              2011 Q2
                                        2011 Q4
                                                  2012 Q2
                                                            2012 Q4
                                                                      2013 Q2
                                                                                2013 Q4
                                                                                          2014 Q2
                                                                                                    2014 Q4
                                                                                                              2015 Q2
                                                                                                                        2015 Q4
                                                                                                                                  2016 Q2
                                                                                                                                            2016 Q4
                                                                                                                                                      2017 Q2
                                                                                                                                                                2017 Q4
                                                                                                                                                                          2018 Q2
                                                                                                                                                                                    2018 Q4
                                                                                                                                                                                              2019 Q2
                                                                                                                                                                                                        2019 Q4
                                                                                                                                                                                                                  2020 Q2

Source: C&W (2020), CBRE (2020), Oxford Economics (2020), adapted by Syntrus Achmea Real Estate & Finance

25/89                                                                                                                                                                                            Syntrus Achmea Outlook 2021-2023
The Dutch
residential market
Outlook for the Dutch
 residential market

  Dutch rental housing:
  a safe haven that offers excellent prospects
  The Netherlands is becoming more densely             the other segments benefit from the housing
  populated, older and more diverse. The               shortage. For years, house prices have been
  number of households is increasing and the           rising faster than household disposable income.
  construction of new homes remains structurally       The same applies to rents in the liberalised
  insufficient to eliminate the housing shortage.      rental sector. The shortage of investment
  In the short term this shortage will actually        product, combined with investor interest in
  increase further. As a result, the vacancy risk is   residential properties, means that prices will
  low. Consequently, Dutch residential property        continue to rise in the long term. Particularly
  is a safe investment category, including when        in a number of big cities, there is a shortage
  viewed from an international perspective.            of affordable housing for a broad group of
  This applies not only in the Focus region;           people on average incomes. That is why institu-
  there is also upwards potential (including           tional investors are increasingly investing in
  rental potential) in a number of cities in the       mid-market rental housing. There is structural
  Opportunity region.                                  demand for this type of housing and a low
                                                       vacancy risk, even during economic downturns.
  The coronavirus is causing uncertainty for the       Stable long-term returns and social impact are
  housing market in the short term, which means        the ideal match for the investment policy of an
  that a brief dip in prices may be expected.          institutional investor.
  In the rental market, this will mainly have an
  adverse impact on the prime segments, while

  Boschkens-West, Goirle

27/89                                                                 Syntrus Achmea Outlook 2021-2023
The housing market in focus

                            Social rental
                            Mid-market rental
                            Other liberalised rental
                            Owner-occupied housing            Multi-family residences

                       Single-family residences

The Netherlands has around 7.8 million residential     homes) are rented out in the mid-market rent
properties. This housing stock is divided into four    sector. The remaining 200,000 residential
ownership categories and two housing forms. Our        properties are rented out for more than
analysis of the development of these ownership         €1,000 per month and a portion of them for more
categories and housing forms has been made with        than €1,500. In the period 2021-2023 this number
the aid of simulations from a housing market model     will rise to 215,000, which amounts to 5,000 new
(ABF Socrates). This model charts supply and           homes per year.
demand and explores the future based on various
scenarios. We also distinguish between three           Owner-occupied housing
geographical areas with different outlooks.            The Netherlands has around 4.5 million owner-oc-
                                                       cupied homes. Accounting for 57 percent of
Ownership categories                                   the total housing stock, this is the most popular
                                                       housing form in the country. The high demand,
Social rental                                          driven by low mortgage interest rates, is reflected
The Netherlands has around 2.7 million homes           in rising house prices.
that are rented out for less than the rent control
ceiling, which is €737 per month in 2020. This         Housing forms
accounts for more than 35% of housing stock in the     The four ownership categories can be subdivided
Netherlands. This social rental housing is allocated   into two housing forms: single-family and
to people in low income groups. The construction       multi-family residences.
of new social rental housing has remained low in
recent years due to the levy on lessors. Housing       Single-family residences
associations have announced that they will be          Single-family residences are homes that have their
making substantial investments in new homes in         own garden and are intended to accommodate
the coming years.                                      a single household (family). This housing type is
                                                       divided into a number of subcategories based on
Mid-market rental                                      location (detached, semi-detached, corner houses
The mid-market rental segment encompasses              or terrace houses) or layout (split-level houses and
rents ranging from the recent control ceiling up to    what the Dutch call a ‘drive-in home’, with a garage
approximately €1,000. In 2020 there are approx-        at ground level). The number of single-family
imately 400,000 rented homes in this segment.          residences in the Netherlands has risen sharply
According to forecasts (ABF Socrates), the             in recent decades on account of the construction
number of mid-market rental homes is set to rise       of new-build housing estates. In fact, this is now
to 520,000 by 2040 (+25%). In the longer term,         the most popular housing form, accounting for a
demand for mid-market rental housing is expected       total of 5 million homes in the Netherlands. Of this
to be high and, because it concerns a broad target     number, 312,000 fall within the liberalised rental
group, it will be virtually structural in nature.      segment.

Other liberalised rental housing
The liberalised rental housing sector accounts for
600,000 properties, which is 7.7 percent of the
total housing stock. The vast majority (400,000

28/89                                                                  Syntrus Achmea Outlook 2021-2023
Multi-family residences                                  Opportunity
A multi-family residence is a home in a complex          The Opportunity region mainly consists of
which also contains other homes and which is             smaller municipalities situated close to the Focus
often located in an urban area. This type of housing     region and medium-sized cities that are also well
typically has shared staircases/lifts, entrances         connected to the bigger cities. Some examples of
and outdoor spaces. The apartment segment                these municipalities are: Gouda, Deventer and Ede.
is divided into a number of subsegments such
as student accommodation and senior citizen              Other
housing (self-contained or with shared facilities).      The Other region consists of municipalities that
There are a total of 2.75 million apartments in the      are located on the periphery and have a weaker
Netherlands, 305,000 of which are in the liberalised     demographic prognosis. Some examples of these
rental segment.                                          municipalities are: Roermond, Goes, Den Helder
                                                         and Almelo.
Strategic regions
Syntrus Achmea’s categorisation of strategic
regions primarily indicates the attractiveness of
particular municipalities over a 10-year horizon. This
is based on expected demand for housing in the
liberalised rental segment, housing preferences and
the housing shortage. Syntrus Achmea has divided
municipalities into three strategic regions that
share similar characteristics.

Focus
The Focus region consists of municipalities with
high demand for housing, high prices and also
high housing shortages. Some examples of these
municipalities are: G4, Eindhoven, Groningen and
Nijmegen.

29/89                                                                   Syntrus Achmea Outlook 2021-2023
Facts and figures

    Average apartment size
    A multi-family                           The multi-family residences
    residence in the                         built in Amsterdam most

                           71 m²
    Netherlands                              recently (since 2015) are
    has an average                           the smallest (57 m²)
    surface area of                          (Source: Statistics Netherlands)

    Sustainability                                    Age of
                                                      home-leavers

    21.7%                                             The housing shortage means that
                                                      younger people are living with their
                                                      parents for longer. On average
    is the share of total CO2 emissions               they left home at

                                                      23.5
    accounted for by Dutch households
    in Q1 2020, a large portion of which
    is attributable to homes. It is

                                                      year old
    therefore essential to make homes
    more sustainable
    (Source: Statistics Netherlands)

                                                      (in 2017), compared
                                                      with 22.8 in 2012
                                                      (Source: Statistics Netherlands)

        Mid-market rental                             Demographics
                                                      In the next 20 years there will
                                                      be an extra

                                                      1 million
        75%
                                                      households in the Netherlands,
                                                      an increase of 13 percent

                                                      (Source: ABF)
        of residential properties owned by
        institutional investors are in the
        mid-market rental segment, i.e.
        rents ranging from €720 to €1,000
        (Source: IVBN)

30/89                                                              Syntrus Achmea Outlook 2021-2023
Market trends
User market

HOUSING SHORTAGE

Number x 1.000                                                                                                                Percent

450                                                                                                                                6
                                                                                                              Forecast                   Housing shortage
400
                                                                                                                                   5     (left axis)
350
                                                                                                                                         Relative housing
300                                                                                                                                4
                                                                                                                                         shortage (right axis)
250
                                                                                                                                   3
200
150                                                                                                                                2
100
                                                                                                                                   1
50
0                                                                                                                                  0
          1970

                 1978

                        1986

                               1990

                                      1994

                                             1998

                                                     2002

                                                            2005

                                                                   2006

                                                                          2010

                                                                                 2012

                                                                                        2015

                                                                                                2016

                                                                                                       2019

                                                                                                              2024

                                                                                                                     2029
Source: DNB, Primos, adapted by Syntrus Achmea Real Estate & Finance (2020)

The housing shortage has risen to a record level                                               This shortage will increase further in the years
in recent years, driven by accelerated population                                              ahead. Demand will remain high, while the tighter
growth and insufficient housing construction. There                                            requirements on nitrogen emissions, PFAS and
are regional differences: the shortage is largest                                              noise will prevent supply from adapting to keep
in the agglomerations of the Randstad region,                                                  pace. In addition, these requirements will push up
Gelderland and North Brabant.                                                                  costs and contribute to lower initial yields.

PRICE TRENDS

Percent

10
                                                                                                                                           Trend in vacant
8
                                                                                                                                           possession values
6
4                                                                                                                                          Rental growth
2                                                                                                                                          Trend in incomes
0
-2
-4
-6
-8
-10
           2010         2011          2012          2013       2014         2015        2016           2017          2018      2019

Source: Eurostat, Statistics Netherlands, MSCI, adapted by Syntrus Achmea Real Estate & Finance (2020)

Housing prices have risen sharply in recent years                                              Because the housing shortage is set to persist,
due to a combination of low mortgage interest                                                  housing prices are likely to rise further over the
rates, the housing shortage and a strong economy.                                              long term. Rents will only come under pressure in
Rental prices have shown stable growth over the                                                the prime segment.
same period. The sharp rise in housing prices (for
both owner-occupied and rental properties) has
steadily eroded the affordability of homes, as
incomes have not risen at the same rate. COVID-19
may cause a price dip in vacant possession values.

31/89                                                                                                                       Syntrus Achmea Outlook 2021-2023
AFFORDABILITY

Percent

30
                                                                                                                                                                       Liberalised
25                                                                                                                                                                     rental housing
                                                                                                                                                                       Average
20
                                                                                                                                                                       Social
15                                                                                                                                                                     Owned-occupied

10

5

0
           2010           2011           2012              2013          2014          2015           2016           2017           2018              2019

Source: Eurostat, adapted by Syntrus Achmea Real Estate & Finance (2020)

Residents of rental properties in the liberalised                                                           have declined in relative terms as incomes have
rental sector are spending an increasing share of                                                           risen and mortgage interest rates have fallen.
their income on housing costs. In contrast, the                                                             Adding more mid-market rental homes to the
housing costs of homeowners and tenants in the                                                              housing stock will improve affordability. This will be
social rental sector                                                                                        a key challenge for institutional investors.

VACANCY RATES

Percent

8
                                                                                                                                                                       Multi-family
7
                                                                                                                                                                       residences
6                                                                                                                                                                      Single-family
5                                                                                                                                                                      residences
4
3
2
1
0
          1999
                 2000
                        2001
                               2002
                                      2003
                                             2004
                                                    2005
                                                           2006
                                                                  2007
                                                                         2008
                                                                                2009
                                                                                       2010
                                                                                              2011
                                                                                                     2012
                                                                                                            2013
                                                                                                                   2014
                                                                                                                          2015
                                                                                                                                 2016
                                                                                                                                        2017
                                                                                                                                               2018
                                                                                                                                                      2019
                                                                                                                                                             2020 H1

Source: MSCI, adapted by Syntrus Achmea Real Estate & Finance (2020)

Vacancy rates in rental housing have declined                                                               In mid 2020 residential vacancy rates were slightly
sharply in recent years. Vacancy rates for single-                                                          higher than at the end of 2019. Although economic
family residences are lower than for multi-family                                                           uncertainty is driving vacancy rates up further, the
residences, which generally change occupants less                                                           housing shortage will limit the rise.
frequently because the target group (families) are
more attached to their homes than households who
live in apartments.

32/89                                                                                                                                      Syntrus Achmea Outlook 2021-2023
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