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Market update 2021

Public policies

Cabinet formation and plans

In January, the third cabinet led by Prime Minister Mark Rutte collapsed, and Dutch parliamentary elections were held on 17 March. After a record formation period of 299 days, a ‘Rutte-IV’ cabinet was established in December. The coalition of four parties (VVD/D66/CDA/CU) reflects the composition of the previous cabinet. The cabinet will face the challenge of dealing with a number of major issues. Besides the Covid-19 crisis, the main focus points will be the climate and the nitrogen emissions crisis, plus the housing market. Furthermore, the government is planning to allocate more funding to education, justice and security.

As of 1 January 2021, the real estate transfer tax (RETT) for property acquisitions increased to 8%, for residential as well as for commercial real estate. In order to put an additional brake on record house price increases, the transfer tax for investors will be increased to 9% as of 2023. In 2021, a number of local authorities launched a number of initiatives, such as the halt on buy-to-let within the existing housing market.


In 2021, the caretaker cabinet was for the most part focused on fighting the Covid-19 pandemic and finding a balance between limiting the spread of the virus and keeping the economy and companies healthy. Despite the continued roll-out of the vaccination programme, lockdown measures came and went in 2021, which had a major impact on (non-essential) retail and hotel and leisure segments. While most restrictions were lifted in the course of the third quarter, November and December in particular once again saw heavy restrictions for retailers.

The Dutch government implemented a set of emergency measures to mitigate the financial burden placed on companies by the Covid-19 outbreak. The initial plan was to end most of these measures from 1 October 2021 onwards. However, following the emergence of the new Omicron variant and a new lockdown, financial measures were extended. It is notable that, although the companies affected complained that restriction had led to a substantial reduction in their financial buffers, 2021 still saw the lowest number of bankruptcies for many years.

Retail real estate policies

On 24 December 2021, the Supreme Court issued a new ruling regarding Covid-19 related rental discounts for the retail and hospitality industry. The ruling stated that not being able to fully exploit the rented property as a result of Covid-19 measures counts as an unforeseen circumstance for all lease agreements concluded before 15 March 2020. In those cases, the courts can amend the lease by reducing the rent for the period of revenue loss. In its ruling, the Supreme Court provides a calculation model that offers a tool for calculating any rent reduction. For leases concluded after 15 March 2020, the court must assess on a case-by-case basis whether revenue loss is due to unforeseen circumstances.

Occupier market

Covid-19 continued to have a huge impact on the Dutch retail market in 2021. In the first two months of 2021, there was a full lockdown of all non-essential shops. In March and April, the limitations were eased in phases and people were allowed to shop without an appointment by the end of April, but with continued restrictions on the number of people inside shops. From July onwards, limitations were reduced to a minimum. In this period of relief, retail sales flourished again and retailers were able to regain at least some of their lost sales.

However, as Covid-19 regained momentum again by the end of the year, non-essential shops were forced to close at 17:00 hours by the end of November, and from 19 December onwards the retail sector found itself in an almost complete lockdown, with all non-essential shop forced to close again and missing out on another Christmas period. And throughout 2021, limitations on the hospitality sector, an important part of the fabric of city centres, have generally been even more strict than those for the retail sector.

As policies regarding lockdown measures came and went in 2021 so did the retail sales. Non-essential shops, generally located in the city centres and large shopping centres, were hit particularly hard. Essential shops, on the other hand, generally located in local shopping centres, recorded more than healthy sales figures over the year.

Perhaps surprisingly, the retail occupier market registered strong activity and the 730,000 m² taken up was even 11% higher than the average of the five pre-Covid years. It seems that property owners and retailers are still managing to find each other, even in this difficult market. New concepts, pop-up stores, lower rents and other flexible solutions are creating a lot of dynamism in this challenging segment. At the same time, strong brands are benefiting from the increased vacancy and seizing opportunities in the market. On top of that, vacancy actually declined throughout the year, to 6.8% from 7.5% in 2020. This was primarily due to a substantial drop in total stock: according to Locatus, 16% of vacant stores were taken-off the market and converted to other uses, primarily residential. Finally, downward pressure on the non-essential part of the retail market, led to another 9.0% drop in prime high street rent levels in 2021 (calculated average of top five cities). However, there is still a lot of financial pressure on retailers in non-essential sectors and, despite government financial support packages, it remains likely we will see more bankruptcies or retailers shutting up shop, also due to the ongoing growth of online sales.

Investment market

Investor appetite remained strong in almost all real estate sectors. and the overall investment volume totalled € 18.2 billion, just short of the € 19.0 billion in the previous year. This despite the negative effects of the increase in the real estate transfer tax from 1 January 2021, which spurred many investors to close their deals in Q4 2020 and led to subdued transaction volumes in the first half of 2021. 

In 2021, retail real estate investments came in at a relatively modest € 1.8 billion, 22.4% lower than the previous year. A closer look at the various retail segments reveals that high street investments saw a particuilarly sharp drop, while investments in local shopping centres and supermarkets remained strong. Once again, the local shopping centre segment accounted for the largest share of investments.

Lower investor demand and dropping rent levels were reflected in higher prime high street yields. Compared with pre-Covid levels, yields in Amsterdam, Rotterdam, The Hague and Eindhoven moved outward by 25-35 bps, and even by 65 bps in Utrecht. MSCI data on yields for convenience shopping centres, on the other hand, showed a 20 bps contraction since December 2020.

The Fund believes that prime retail destinations in the city centres of the largest cities will continue to see strong demand from retailers, also in the long term, and that the market has started to bottom out. Yields for convenience shopping centres and supermarkets are expected to contract.

Investor key factors

2021 forecast



Prime net initial yields high street (excl. purchase costs, year-end)



Investment volumes (€ bln)

€ 1.8

€ 2.4


Sources: JLL, Bouwinvest Research & Strategic Advisory