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Time for new growth in the high streets
The Dutch retail real estate market has been focused on recovery and change over the past two years. After challenging times during the pandemic, with vacant spaces and a strong shift towards online shopping, consumers returned to physical stores starting in 2023. By 2024, a clear recovery was visible, with the city centers of Amsterdam, Utrecht, and Maastricht even approaching pre-pandemic levels. There is also a positive trend in revenue: the net sales of physical fashion stores have shown recovery in recent years, according to INretail (2024). These developments indicate a renewed appreciation for the physical shopping experience.
Amstelplein, Uithoorn
FIGURE 1: Development of footfall in major shopping cities (2019 = 100)
Source: Locatus (2024), edited by Achmea Real Estate
FIGURE 2: Net revenue of physical fashion stores (2015 = 100)
Source: INretail (2024), edited by Achmea Real Estate
Although consumers are increasingly visiting physical shops, e-commerce remains a significant force in the retail sector. At the same time, the composition of shopping streets is changing due to trends such as the rise of single-brand stores from major brands like Zara and H&M, which increase the dominance of these brands and displace smaller multi-brand shops. This shift is partly driven by changing consumer behaviour during the pandemic, when online shopping surged.
Despite the stabilisation of growth in online retail sales (see Figure 3), the impact on physical shops remains noticeable. Urban retailers must adapt by offering unique experiences and personalised services to attract both physical and online shoppers. The growing dominance of major brands highlights the need for a strong omnichannel strategy, enabling retailers to cater to the diverse preferences of consumers. The collaboration between physical shops and online platforms will be crucial for future success. Retailers who prioritise innovation and flexibility can fully capitalise on a dynamic market filled with opportunities and challenges.
FIGURE 3: Revenue growth in online retail (year-on-year change)
Source: CBS (2024), edited by Achmea Real Estate
A future for retail: Innovation and experience
In the future, ‘omnichannel retail’, where physical shops and online platforms work seamlessly together, will become the standard. Consumers increasingly expect a personalised shopping experience that provides instant access to product information while allowing them to physically interact with products.
Although the number of physical shops in the Netherlands is declining, existing stores are becoming larger and more versatile. According to data from Locatus (2024), the average shop floor area is increasing, while vacant spaces are becoming smaller. This trend reflects a shift towards larger stores that offer space for interactive experiences, such as virtual product demonstrations, real-time recommendations, and personalised discounts.
Physical shops will continue to play an essential role, as many consumers prefer to see, touch, and easily exchange or return products in person. At the same time, the success of retailers will increasingly depend on their ability to adapt quickly to trends and effectively integrate online channels into their retail model. By leveraging innovation, retailers can further enhance the customer experience and improve operational efficiency, ensuring they remain future-ready.
Beursplein, Rotterdam
The continuous evolution of the high streets
In the coming years, city centres will continue to transform from traditional shopping districts into multifunctional spaces that combine living, working, leisure, and culture. Shops focused on personal care and “to-go” food and beverage outlets are rapidly gaining ground. At the same time, pressure on the housing market is driving the repurposing of retail spaces for other uses, such as residential and hospitality, enhancing urban liveability and vibrancy. Small to medium-sized city centres, like Heerlen, Roosendaal, and Alkmaar, are becoming more compact as retail zones concentrate around the busiest areas. This increases their attractiveness and liveability, while vacant properties in secondary and tertiary locations find new purposes.
The successful city centres of the future will offer a balanced mix of functions that work together within the available space. Municipalities play a crucial role in facilitating this transformation by introducing flexible zoning plans and fostering collaboration with the private sector, for example, through Business Investment Zones (BIZ). This approach encourages investment and cooperation between public and private stakeholders, strengthening the city centre. Investors contribute to the development of city centres by collaborating with local authorities, entrepreneurs, and other stakeholders. It is vital to balance their commercial interests with broader societal goals, such as sustainability, inclusivity, and preserving local identity.
In cities where investors prioritise diversity and liveability, this can lead to successful and dynamic urban development. A strong presence of property owners within Business Investment Zones (BIZ) can support a collective strategy to revitalise shopping streets. Initiatives might include improving the visibility of shops, organising events, and promoting an attractive streetscape. Active involvement of property owners can influence decisions that impact the value and appeal of their assets.
Furthermore, city centres must continue to meet the needs of both residents and visitors. This involves not only providing a diverse retail offering but also ensuring the urban space is pleasant and accessible, with good mobility and connectivity. City centres that embrace sustainability, diversity, and multifunctionality will outperform their competitors and enhance liveability for residents and visitors alike.
The Rotterdam City Centre BIZ, co-founded by Achmea Real Estate, has significantly improved the city centre through joint investments and collaboration between entrepreneurs and property owners. The area has become cleaner, safer, and more attractive, resulting in increased footfall, higher shop occupancy rates, and rising rental and property values. This public-private partnership has delivered both economic and social benefits, enhancing the appeal of the city centre.
Decreasing risks in investing in prime locations
The bankruptcy of V&D in 2015 marked a significant turning point in the Dutch retail market. It led to a sharp decline in investor confidence in high streets, with a notable decrease in institutional investments in city centres. This trend was further exacerbated by the COVID-19 pandemic, during which lockdowns and the end of government support led to an increase in bankruptcies, such as that of Blokker. It is expected that this could trigger a domino effect in smaller cities: the loss of major retailers like Blokker will reduce foot traffic and make high streets in smaller municipalities less attractive. Rising costs due to the energy crisis, higher wages, and competition from online retail are putting further pressure on traditional retail chains. The middle segment is particularly affected, unless businesses differentiate themselves with competitive prices (such as Action) or a unique customer experience (such as Starbucks).
In larger city centres, however, a clear recovery is visible (see figure 4). Vacancy rates have fallen below the national average of 6.6%, while rents and sales in physical stores are increasing. In particular, international investors and core retailers have regained confidence in the nine strongest city centres. The vacancy of locations previously occupied by chains such as Blokker presents opportunities for expanding retailers to introduce new concepts in well-visited areas.
"The decline of the high street is not good for anyone. But if Blokker really goes bankrupt and there is no recovery, we would be interested in acquiring some of their properties. There are still many locations where Wibra is not yet present but could easily be. It's clear that we are interested." Bas Duijsens – CEO Wibra
At the same time, the shift towards flexible and multifunctional retail spaces is becoming increasingly prominent. Areas where retail is combined with residential, hospitality, and office spaces are proving essential in reducing structural vacancy. This type of property offers investors resilient investment opportunities, as it is better equipped to withstand economic shocks and changing market conditions. An example of this is the growing transformation of shopping centres into mixed-use hubs.
Looking ahead, success in retail will depend on resilience, innovation, and the ability of retailers to adapt to changing consumer behaviour. Experience and customer orientation remain key for both retailers and investors in retail real estate. In popular shopping areas, even scarcity is being reported in better locations, creating room for market rent growth. For investors, these developments mean that the risks of investing in high streets are decreasing, and the market is heading towards a new, more stable equilibrium.
FIGURE 4: Current vacancy versus 2-year trend
Source: Locatus (2024), edited by Achmea Real Estate
Real wage growth and consumer confidence drive retail consumption
In addition to the success of retail investors being dependent on the diverse mix of functions within the shopping area, good accessibility, and sustainable property management, the spending potential of the location is a crucial indicator of the success of an investment in retail real estate. This potential reflects the willingness and ability of consumers in a specific area to purchase goods and services. A high spending potential typically translates into attractive earning opportunities for retailers and, consequently, for investors in retail real estate. Retailers are willing to pay higher rents in locations where they expect high footfall traffic, resulting in an increase in rental income for property owners.
The outlook for the coming years is positive. We expect retail sales growth to continue, particularly due to the combination of ongoing wage increases through collective labour agreements (CLA) and decreasing inflation. This ensures that consumers, after adjusting for inflation, have more disposable income, which is expected to drive sales growth through to 2026. After this period, growth in consumer spending is likely to flatten but will maintain a stable growth rate. This presents opportunities for retailers to remain profitable and for property investors to generate stable rental income, with potential for indexation.
A key factor in this dynamic is the relationship between saving, consuming, and wage development, as illustrated in figure 5. When savings ratios are low, more is typically spent, which often coincides with higher confidence in the economy. This boosts retail sales and creates a favourable climate for real estate investments. In this economic climate, retailers can benefit from higher spending, while real estate investors can profit from a favourable return on their investments. The focus will therefore remain on locations with high spending potential, where the synergy between consumer spending and rental income can be optimally leveraged.
FIGURE 5: Year-on-year development of CLA, CPI, and retail sales volume versus savings ratios
Source: CBS (2024), CPB (2024), Oxford Economics (2024), edited by Achmea Real Estate
House Modernes, Utrecht
Spending potential in cities grows due to population growth and urbanisation
Population growth in major Dutch cities is driven in part by immigration, with both low- and highly educated migrants playing an important role. According to CBS (2024), many newcomers come from EU countries such as Poland, Romania, and Bulgaria. They often find temporary or seasonal jobs in sectors with labour shortages, such as logistics, agriculture, and construction. These groups predominantly settle in cities where demand for low-cost labour is high, such as Rotterdam and The Hague.
In addition, the number of highly educated migrants is increasing, especially from countries outside Europe, such as India and China. They are attracted by jobs in the IT, finance, and tech sectors and often choose cities like Amsterdam, Eindhoven, and Utrecht. These cities not only offer a dynamic labour market but also amenities such as international schools and expat-friendly infrastructure. As a result, these migrants bring both expertise and significant purchasing power, stimulating the urban economy.
The five largest cities offer strong investment opportunities due to their growing economies, population increases, and high-quality amenities. Figure 6 shows that the share of the population living in the five largest cities in the Netherlands will significantly increase in the coming years. Immigration and urbanisation are boosting the spending potential in shopping streets, driving demand for a wide range of products and services. Investors can capitalise on these trends by investing in the shopping streets of rapidly growing cities, where vacancy rates are decreasing, and demand for retail space is rising.
FIGURE 6: Population growth forecast for G5 cities
Source: ABF Research (2024), CBS (2024), edited by Achmea Real Estate
Stabilisation of rent prices and attractive income return
The Dutch retail market has experienced declining rent levels between 2015 and 2024, but recent recovery is visible, particularly in the most popular shopping streets. Rents are stabilising at an attractive level, drawing increasing numbers of investors (see figure 7). In the most sought-after areas, a slight rent growth is even observable, which has been uncommon for some time.
The polarisation between A1 locations and secondary areas in city centres is increasing. In small to medium-sized cities, the gap between A1 locations and secondary locations is growing faster and more structurally, due to limited adaptability, which leads to higher vacancy rates and decay. In larger cities, the gap is also widening, but the scale and dynamics offer more opportunities to revitalise secondary locations, provided there is investment in quality, diversity, and additional functions. Prime locations are becoming more attractive to investors, while neighbourhood shopping centres remain essential for meeting daily consumer needs. After a rent correction of 25-35% in high streets in recent years, the market has stabilised, providing a healthy foundation for controlled growth. Retailers benefit from lower rents that align with renewed business models, and landlords can expect strong demand for well-located retail space.
Despite previous declines in property valuations, retail real estate has offered advantages to investors through rising direct yields (see figure 8). Retail portfolios with a higher proportion of high street properties can provide participants with a high dividend yield, which stands out compared to other sectors such as residential and healthcare real estate, where dividend yields are generally lower. We see positive prospects for the strongest retail areas where, due to the combination of attractive yields and stable rent prices, retail real estate has become an appealing investment option once again.
FIGURE 7: Development of prime market rents by retail area (2015 = 100)
Bron: Cushman & Wakefield (2024), edited by Achmea Real Estate
FIGURE 8: Income return by retail segment
Source: MSCI (2024), edited by Achmea Real Estate
The social role of retail real estate
Retail real estate offers more opportunities for social and ecological impact than many investors realise. Strategic partnerships and innovations in retail investments can not only yield financial returns but also contribute to sustainability and local communities. Investors can make a tangible impact through investments in retail real estate across the following themes:
Collaboration with stakeholders
The collaboration between property owners and retailers offers opportunities to achieve sustainability goals. In redevelopment projects or tenant transitions, significant energy savings can be realised, for example, by implementing energy-efficient systems or renewable energy sources. Green leases play a key role in driving sustainable performance.
Energy savings and sustainability measures
Landlords can integrate sustainable technologies such as solar panels, rainwater harvesting systems, and energy-efficient installations. Including sustainable performance indicators in lease contracts promotes further improvements and helps investors reduce costs, lower energy consumption, and minimise their ecological footprint.
Social impact and community development
Investing in neighbourhood shopping centres offers opportunities to strengthen social cohesion within communities. These centres not only function as retail spaces but also serve as meeting places that contribute to the community’s well-being, for example by supporting local initiatives and educational programmes.
Entrepreneurship and employment
Retail real estate can stimulate local employment and entrepreneurship, particularly in neighbourhood shopping centres. Through community building, investors can contribute to the economic and social vitality of a neighbourhood, which enhances both property value and the satisfaction of residents and customers.
Achmea Real Estate organises activities on behalf of the Achmea Dutch Retail Property Fund in its shopping centres that focus on meeting and connecting people. One key event is Burendag (Neighbour’s Day), which highlights the importance of a pleasant meeting place for the local community. To further strengthen the bond with the local community, we will be collaborating with schools in the vicinity at six of our shopping centres. This collaboration will involve an educational and connective activity, where children, together with local entrepreneurs, will be served a healthy breakfast. This breakfast will take place at the heart of the neighbourhood: our shopping centres, which play a key role in bringing together local residents, associations, and schools.
Karel Doormanstraat, Rotterdam
Investment perspective
The retail investment market in the Netherlands is showing positive developments this year, and we expect the investment volume to continue rising in the coming years. In the first three quarters of 2024, the volume has already surpassed the total of 2023. Historically, most transactions occur in the final quarter of the year, a trend expected to continue in 2024. This indicates a market that is recovering and remains attractive to investors.
After a period of caution, institutional investors are beginning to recognise the rental corrections that have occurred. Despite rising interest rates, the market conditions once again offer attractive returns. Institutional investors have shifted their focus from the best cities to the best locations within the top five cities. Currently, investments of up to ten million euros are the most sought after, as larger investments in single assets can overly influence the diversification within a fund, which increases risk. Therefore, there is greater focus on smaller, stable properties that offer a lower risk profile.
There is currently a mismatch between supply and demand, particularly for investors focusing on neighbourhood shopping centres. Investments in prime supermarkets are scarce, however, this segment is expected to see the highest investment volume. Institutional investors are especially targeting prime investments that meet specific criteria, such as well-performing standalone supermarkets or neighbourhood shopping centres with strong rental income from supermarket or convenience-oriented tenants and good parking facilities.
Consolidation in the supermarket landscape is expected to continue. Profitable supermarkets will remain, while less profitable locations may be repurposed. Supermarkets will need to adjust to rising costs and achieve economies of scale to remain profitable. Additionally, they will seek to negotiate rent reductions during lease renewals. Shopping centres with a significant fashion component, such as district centres, have a higher risk profile. In such cases, it is important to diversify the tenant mix, for example, by adding healthcare-related services such as pharmacies or dental practices to attract a broader audience.
There is ongoing demand for neighbourhood shopping centres, despite the limited supply. Dutch institutional investors remain active in this segment, focusing on long-term, high-quality investments. Sustainability is playing an increasingly important role in the investment decisions of these investors. Foreign institutional investors often target larger shopping centres with higher ticket sizes, while domestic investors focus more on smaller, high-quality assets.
Future investments will heavily depend on meeting 'Paris Proof' criteria. Stricter regulations and the growing value that consumers place on sustainability will encourage investors to select shopping centres that meet these standards. Many existing shopping centres still do not comply with these sustainability standards, which will be an important consideration in future acquisitions.
With higher returns in the high streets, reaching the highest levels in the past ten years, the current market offers investors the opportunity to benefit from both more attractive direct returns and more favourable property valuations (see figure 9). The risks that affected the market in previous years have now been priced in, providing investors with the chance to profit from rising income and improved valuations in a predictable and solid property market.
FIGURE 9: 10-year distribution of prime gross initial yields by retail area
Source: Cushman & Wakefield (2024), edited by Achmea Real Estate
Lijnbaan, Rotterdam
High streets
The retail market currently offers attractive opportunities for investors, particularly in the larger city centres of the Netherlands. Real estate prices are currently favourably priced, providing opportunities for future value growth, especially in the top 9 city centres. These cities benefit from stronger consumer potential than smaller cities, making them appealing to both established and new retailers. Prime locations in cities such as Amsterdam, Rotterdam, Utrecht, The Hague, and Maastricht remain strategically important for omnichannel retailers who are active both locally and online. It is expected that vacancy rates in these areas will stabilise or even decrease, increasing the potential for value growth.
Investors can particularly find opportunities in retail properties of at least 250 m² in well-visible locations in city centres, preferably on the ground floor. The growing trend of mixed-use projects, where retail is combined with other functions such as housing, offices, and hospitality, provides additional opportunities. This creates a constant flow of visitors and strengthens the appeal of the locations, which ensures more stable returns in the long term. Investing in multifunctional areas, where the boundaries between living, working, and shopping are blurred, is therefore a strategic choice.
An important consideration for investors is the selection of locations with flexible zoning policies. This enables properties to be adapted to changing market conditions, reducing vacancy rates and protecting long-term value. Municipalities that stick to rigid zoning may increase vacancy rates in secondary shopping streets, as properties age and become more difficult to redevelop. Investors should therefore seek areas where flexibility in zoning plans facilitates the redevelopment of retail real estate.
Sustainability is playing an increasingly important role in the retail real estate market. The demand for sustainable retail spaces is growing, especially when they offer flexible layouts. Landlords are increasingly offering retail spaces that may command higher rent, but where the lower startup costs for retailers often offset the price difference. This provides investors with the opportunity to capitalise on the growing demand for sustainable and flexible retail spaces.
Despite uncertainties regarding market conditions in smaller cities, it is the stabilisation and future growth of rental prices in larger shopping cities that offer investors the opportunity to invest in prime locations. The demand for retail space in these areas is expected to increase, partly due to the recovery of demand from both existing and new retailers. For real estate investors, it is crucial to carefully consider which locations outside the major cities are suitable for investment.
If demand for retail properties structurally decreases, certain locations, particularly in declining high streets, may become unprofitable for retail, even when rent prices are lowered. In such cases, simply lowering the rent will not be enough to effectively address vacancy. To maintain or increase property value, transformation to other functions, such as residential or cultural uses, is often necessary. Sometimes, even demolition of existing buildings may be the only option to make the location viable again. Investors must therefore be aware of the risks and required investments to successfully transform properties and secure long-term returns.
Kerkelanden, Hilversum
Neighbourhood shopping centres
The COVID-19 pandemic has reinforced the role of neighbourhood shopping centres in investors’ strategies, particularly due to the stability that supermarkets and other convenience stores provide. This sector has been the best-performing segment in the Dutch real estate market over the past year, indicating the resilience of neighbourhood shopping centres. Supermarkets serve as anchors, not only ensuring a steady flow of visitors but also attracting other tenants such as bakers, chemists, and dry cleaners. This creates a dynamic, local offering that caters to consumers’ daily needs.
In addition to retail functions, we are seeing a shift where convenience centres increasingly offer space for non-retail functions, such as healthcare, sports facilities, and social services. This strengthens the position of neighbourhood shopping centres as the physical heart of the community, contributing to social cohesion and foot traffic. These centres, with multiple supermarkets and a diverse offering, benefit from a stable future outlook and are expected to continue performing well, even as online shopping becomes increasingly common.
For investors, this means that neighbourhood shopping centres, with a solid catchment area and a well-balanced offering, remain attractive investment opportunities. The demand for high-quality, well-located centres is high, while supply remains limited. Investing in these centres can provide long-term, stable returns, especially when the offering aligns with the needs of the local community.
Supermarkets play a crucial role in this development. The supermarket sector has proven to be relatively resilient, despite recent economic challenges. The stability that supermarkets provide, both in terms of real estate and in meeting the daily needs of consumers, makes them attractive to real estate investors. Long, indexed lease contracts provide certainty in returns, while supermarkets continue to adapt to changing consumer demands, such as the focus on sustainability, price sensitivity, and local products.
Nevertheless, real estate investors must remain vigilant regarding underperforming supermarkets in their portfolios. It is essential to analyse local market conditions carefully and invest in supermarkets that are well-positioned to benefit from changing market dynamics. Additionally, it is important to invest in supermarkets that are adapting to the rise of online grocery shopping. Although the market share of online grocery shopping has slightly decreased after a temporary peak, it remains a relevant factor in the future. Supermarkets that optimise their physical locations by expanding their floor space can offer a broader range of products and enhance the shopping experience, which benefits both consumers and investors.
Finally, we are seeing a shift in the location choices of supermarkets. Supporting retail areas, such as residential neighbourhoods and town or village centres, continue to grow due to their accessibility and high demand for daily essentials. In contrast, peripheral shopping centres and outlying areas are struggling to remain competitive due to lower population density and limited accessibility.
In summary, for investors seeking stability and forward-looking returns, neighbourhood shopping centres and well-positioned supermarkets remain attractive investments. Adapting to local demand, optimising retail space, and responding to changing consumer needs are key to successful investments in this sector.
FIGURE 10: Development of supermarket supply (total in numbers and m²)
Source: Locatus (2024), edited by Achmea Real Estate
FIGURE 11: Development of supermarket supply per retail area classification (2010 = 100)
Source: Locatus (2024), edited by Achmea Real Estate
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